Vancouver offers up new plan to build affordable housing
Vancouver neighbourhoods will become increasingly dense, adding row housing and intensive development around transit corridors under a plan by Mayor Gregor Robertson to provide residents with more affordable housing.
The housing affordability plan unveiled Monday is every bit as ambitious and transformative as the city’s conversion of industrialized False Creek to a dense, highrise community two decades ago.
Robertson, with the help of a committee he appointed last year, has proposed sweeping changes to the way housing looks in Vancouver.
The plan includes boosting density in traditional single-family neighbourhoods around transportation nodes and arterial streets; creating a special housing authority to cash in on the value of city-owned land; and forming a community land trust and a pension-fund-backed financing agency, all in an effort to solve long-entrenched housing problems.
As the plan develops, there will be more streets of row houses and stacked townhouses radiating out from transit nodes, which will be studded with taller buildings offering a mix of rental, co-op and other forms of housing.
The plan seeks to turn what many critics see as Vancouver’s biggest weakness — its high land values — into a strength by reshaping those lands to take more people, in higher densities and in places not traditionally considered for housing.
It is even toying with the idea of building small numbers of rental units on industrial land, the most endangered zoning in the Lower Mainland, despite efforts by Metro Vancouver to preserve manufacturing and industrial job space.
The interim concept, titled Bold Ideas Towards an Affordable City, was released publicly Monday at a press conference at city hall.
It contains no cost estimates or targets for how many affordable homes could be created by the changes.
However, Robertson and Olga Ilich, his co-chair on the city’s affordable housing task force, said they expect many of the changes to begin taking effect this fall after city council adopts the committee’s final report.
The committee focused on affordability issues for households earning between $21,500 for a single person and $86,500 for a couple.
The report’s recommendations are framed around four broad ideas: increasing supply and diversity of housing; creating agencies to administer and fund it; protecting existing social and affordable rental housing, and reducing red tape for developers at city hall.
Robertson and Ilich, who is also a developer, outlined a number of key things they believe the city can do to encourage construction of affordable housing:
• Creating a city-owned “housing authority” to buy, develop and administer land for social and affordable housing.
• Setting up and putting into a “community land trust” property that would be administered by a non-profit corporation separate from the housing authority.
• Forming a “community-based financing agency” funded by unions, pension funds, religious organizations, foundations and others to offer low-interest construction financing, a key to bringing down the cost of housing.
Robertson said the city, developers and land-rich homeowners all need to set their sights lower if the significant gap in housing affordability is to be bridged. “It may not have some of the returns to developers that we’ve seen in the past years when we had boom years and bigger margins. Likewise, it won’t generate the same sized community amenity contributions for the city,” he said.
“We all have to ratchet down our expectations for big gains that are leveraged out of higher housing prices. Our goal is to get more affordable housing. That still means jobs and business and profits for developers and it means a real benefit for the community.”
The affordability gap is significant in Vancouver, where nearly 40 per cent of households spend more than 30 per cent of their income on housing. For those under 34, nearly half spend more than a third of their income on housing.
The city has one of the lowest rental vacancy rates in the country, and the highest rents among Canada’s largest cities. Much of its stock of rental housing was built in the 1960s and 1970s, and little or no dedicated rental has been built in the last two decades without the support of city initiatives such as the Short Term Incentives for Rental program or the province’s purchase of Downtown Eastside hotels for social housing.
The city also grappled with promoting affordable housing more than 20 years ago, when a surging real estate market led to wholesale demolition of rental neighbourhoods. Its solution was to provide land to a single developer to build market rental units with price increases limited to the consumer price index.
That deal between mayor Gordon Campbell and developer Jack Poole and a group of union pension funds resulted in the construction of 1,400 permanent rental units at a time when interest rates were much higher. The deal saw the creation of VLC Properties Ltd., now Concert Properties Ltd., one of the largest pension fund-backed development companies in Canada.
This time, the city is planning a beefed-up version of VLC, with a housing authority that would make vast amounts of its land available to a variety of qualified developers, who would have to provide their own financing at no risk to the city.
“The difference is that we are taking a look at a much bigger area of city-owned land,” said Ilich. “[VLC] was a good model. It worked at the time, and we are in fact taking a look at doing that on a bigger scale.”
Deputy city manager David McLellan said the city’s real estate division is conducting an inventory of available land for the housing authority.
David Podmore, Concert’s chief executive officer, said the city’s plan is clearly a scaled-up version of VLC, which eventually stopped building rentals because the city stopped giving it access to suitable land.
He said VLC found it could get a better rate of return for its pension fund investors by building condos in B.C., although it still earns a respectable 6.5-per-cent average return on rental buildings it constructs in Toronto.
He said Concert would be interested in participating if Vancouver resumes the program. But he cautioned that the city has to ensure it does not expose itself to losing its lands if a development fails and is foreclosed on by a lender.
Vancouver is still wrestling with the aftermath of the Olympic Village fiasco in Southeast False Creek, where it became a financial backer for a private developer that eventually went into receivership. But McLellan said today’s situation is different.
“In the case of the Olympic Village, we basically had a gun to our heads,” he said. The city was on the hook because it had given a financial guarantee to the mortgage lender, Fortress Management Ltd. Under the new model, the city won’t allow itself to be tied up financially, he said. If a developer fails to finish a project, the bank won’t be able to seize city lands.
“All they will have access to is the buildings, but we still will own the land,” McLellan said.
The task force also looked at adding new “transition zones” that scale down from high density housing around transportation and transit hubs, adding new forms of housing such as row houses and stacked townhouses, and allowing for more laneway houses and secondary suites. It also wants the city to encourage owners of under-utilized or vacant land such as parking lots at churches and post-secondary institutions to consider conversion to rental housing.
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