This 12-page report from the BC Gov’t and Service Employees’ Union (BCGEU) recognizes that our affordability crisis has many causes, and proposes several measures to deal with them. [Note: the plan is available HERE, but you’ll require a free Scribd account to download it].
You can sign a petition advocating for the BCGEU recommendations HERE.
Writing on behalf of its 72,000 members, the BCGEU says this:
Our housing system and real estate market has become overpowered by a speculative purchasing environment and our current methods for regulation, planning and taxation have failed to manage the effects. The crisis is the result of three main factors:
- The influence of external investment capital in the province
- Increased mortgage lending and profit-driven financial institutions which are fueling the speculative frenzy
- Poor real estate regulations and land-use policies that create opportunities for private profit at the expense of the public interest.
While public attention has focused on the effects foreign investment has had in the region, the reality is that foreign investment is just the catalyst of the crisis while financial institutions have been the fuel. Banks and other financial institutions have fueled the crisis by approving larger mortgages than they would otherwise allow, spurring domestic buyers to chase property prices that would usually be regarded as high-end anomalies.
. . . we think that a meaningful plan for addressing B.C.’s housing and affordability crisis requires the following:
1. Reform property taxes to target speculators and raise funds for affordable housing and infrastructure. This reform would require the following:
- Implementing a provincial land value capture tax to curb speculation and capture a portion of the value created in real estate by infrastructure projects paid for by the public
- Reforming the property transfer tax to target high-end investors, capture windfall gains on investment properties, and remove loopholes that allow landowners to transfer property without paying tax by transferring shares in a corporation
- Reform the Foreign Buyers Tax to add a surcharge on those owners who do not reside and earn income in B.C
2. Amending legislation to protect renters and better regulate real estate transactions. Our plan calls for:
- Protecting renters and rental stock by closing loopholes in the Residential Tenancy Act and regulating and taxing short term rentals,
- Strengthening regulations on the real estate industry
- Revising the Local Government Act, Community Charter and Vancouver City Charter to give local and provincial governments the appropriate balance of power needed to implement the recommendations
3. Investing in new affordable public housing and infrastructure
- Establishing a clear and accountable 10-year buildout strategy for new affordable public housing and a plan to support, maintain and regenerate existing affordable housing stock
- Integrating and aligning the affordable housing strategy with planned transit infrastructure and the emerging poverty reduction and universal child care plans.
Sounds like a good start.
So the ‘plan’ is to introduce a whole new series of taxes, money laundered through the BC gov’t by GEU staff, and expand the public service, then with whatever’s left over, build gov’t housing.
Zero consultation, zero credibility, zero traction.
The development and real estate industries have had 15 years to deal with their corrupt practices (shadow flipping, purchasing politicians through corrupt political donations, offshore presale flipping …). The damage has been done on top of the normal land lift from urban growth, high demand and cheap credit.
Zero consultation. Zero credibility. Too much traction.
Whatever you might say about BC’s civil service the crack about money laundering is unwarranted. The real estate industry on the other hand…
http://theprovince.com/business/real-estate/mysterious-wheeler-dealer-is-at-centre-of-a-web-of-b-c-real-estate-deals
http://www.huffingtonpost.ca/2017/03/31/money-laundering-real-estate-transparency-international_n_15725728.html
I am pleased to see the discussion on the affordability crisis move up another notch. It’s clear that some non-market options and more creativity in zoning need to be tried.
Turning our attention to Vienna again may help address affordability from a non-market perspective, which may be one the few effective ways to stabilize prices.
From last month’s Spacing Vancouver:
Vienna is an internationally renowned city, attractive to employees from the high-tech industry, scholars, scientists and other professionals often known as the ‘Creative Class’. As an open-minded city, Vienna is a melting pot that welcomes people from all races, cultures and sexual orientation. While other international cities such as Vancouver, London or New York face increasing challenges such as gentrification and lack of affordable housing, Vienna’s housing policies have been praised for being inclusive and protective. Protection of tenants is particularly important as 77% of households in Vienna rent, while in Metro Vancouver only 34% of households are renters. How does a city combine inclusivity with desirability at such a high level?
What many people don’t know is that the City of Vienna has its own Division for Housing Research that is assigned to the city’s Housing Subsidies and Arbitration Board for Legal Housing Affairs. Their work focuses on qualitative and quantitative development of housing supply and demand.
http://spacing.ca/vancouver/2017/10/16/city-vienna-handles-affordable-housing-inclusivity/
Only 33% of housing in Vienna is market housing or rentals. The rest is state-owned and city-managed rentals for a wide variety of citizens, incomes and building types. In some respects, it is similar to the Canadian housing co-op movement (when it was still viable) where a mix of incomes were accommodated in the same building. I believe the Austrian rent and income subsidy regime is a lot more complex and stricter than here.
Some of the housing is built by developers with a profit motive, but that is controlled so that the rental rates and property values are quite stable. Nonetheless, many private builders participate in partnership with the state.
The Wiener Wohen is Europe’s biggest housing administration and owns 220,000 housing units in Vienna and manages many layers of rent and housing-related operating expenses, and income subsidies. The Austrian government distributes funds from tax revenue to nine Austrian states, and Vienna alone received the equivalent of 570 million euros in 2017 for publicly-funded housing. I would assume the objections to this social democracy in housing are muted because this system has been in place for nearly a century. In fact, the majority of people support this national program.
Supply and demand matter ….
The overall scale today is mind-boggling, but incrementally over decades, it seems perfectly manageable. About 6,400,000 m2 of Viennese land (almost 1,600 acres) has now been bought and developed or held in reserve for the future since the 1970s. Acquiring that much land in Vancouver over time (equivalent to 1.6 Stanley Parks), and permanently removing it from our highly-commodified real estate market, would have undeniable effects on market prices. With 67% of total housing supply now publicly-owned and accompanied by policies on protecting heritage and promoting high quality architecture and urban design, Vienna has achieved a level of stability and urban quality we can only dream about here.
Vienna is an interesting study and a beautiful city but it is not growing much. Neither has it. From 1971 to today the population has grown by around 11.5%. 1,619,885 million , to 1,877,836 million.
They have not needed much construction for the past 45 years. In fact, Vienna had a higher population in 1961 than in 1971 and probably a surplus of dwellings.
Vancouver population, meanwhile, has grown by around four times the amount of Vienna, 42%. There really cannot be any comparison.
Vienna has been governed by the same party since 1919, except for only a couple of years when the socialist party was ruled illegal. Vienna is a de facto city state. Vancouver, by contrast, seems happy to be part of a sprawling Metro Vancouver.
In 1911 Vancouver had a population of around 110,000. At the same time Vienna had a population twenty times as large, over 2 million.
Vienna has a diverse population spread over 19 districts, not unlike Metro Vancouver’s diverse population spread over 21 cities. Five of Vienna’s districts have populations of over 100,000, and a couple that approach 200,000, not unlike our Metro cities. Moreover, Vienna’s population is expected to grow by about 250,000 people, mostly through immigration, over the next 11 years, not unlike the city of Vancouver’s rate in the same period, part of the million+ expected in 25 years.
Clearly, the Austrian long-time public housing initiative has balanced the housing supply with in-migration (their natural birth rate is low, like ours, though Austrians do support a wider range of child care facilities and benefits for families with children) and provided a levelling agent to the higher prices that would have resulted from primarily market-driven housing development. In parts of Metro Vancouver there are still lots of affordable median-priced condos. However, where Vancouver differs from Vienna is in the preponderance of private vs. public housing, condos vs. rentals, and the insane protection of a massive hunk of increasingly valuable rare land under exclusive, low-density RS zoning for detached homes.
Part of the range of policies to deal with the affordability crisis here should be to seriously look at: Taking land off the market through tri-level government purchases for rentals; establishing beginning point rental rates at a break-even (non-profit) level; applying a defined range of subsidies to provide housing for various groups in need (the homeless, people with disabilities, low income workers and so forth); and ensuring that the Missing Middle housing types (flats and rowhouses common in Europe) that utilize land very efficiently predominate.
As the result of the greater importance of the public realm and cultural heritage, and given the centuries-old town planning and land use patterns of Austria, Vienna has a far superior urbanism and more stable housing component than Metro Vancouver even though their urban land is probably worth a lot more, metre-to-metre.
“First, a major supply of new homes can happen on public land – City Hall is the biggest land owner in the city. We can put the next set of city-owned sites onto the market, and issue a challenge to the private sector: who can build the most affordable housing on site?
An estimate by our staff of 6 key sites owned by the City could generate 3,000+ new homes. ”
Vancouver Mayor Gregor Robertson, March 2017.
We don’t need to take land off the market.
But by developing city land for public rentals, that housing will be off the market. It remains to be seen if six sites and 3K homes will have any effect on market prices through lowering demand for private units. My guess is that it’s inadequate.
Meanwhile, 80% of all residential land will remain locked under low-density zoning. Which means $3 million detached homes will be protected — or more specifically, the 4,000 ft2 of land they sit on will be glass bubbled. The city could, if it really tried, unlock this enormous resource for more affordable housing types (i.e. between detached structures and tower condos) that consume far less land, with careful attention to preserving heritage and character homes.
The market hasn’t responded that equitably to the affordability issues, though some developers do get the development applications right with competent architects and project managers that don’t try to interfere with municipal bylaws. Not all of them have their act together. Nor does any city that does not recognize that maintaining large lots tightens the constraints on our land supply, and jacks the prices.
It’s pretty simple: when land is expensive, use less of it for more housing, and focuse on all income levels and needs.