City-wide rezoning without consultation

Unprecedented rezoning rush continues

By Elizabeth Murphy, Vancouver Sun, Saturday, August 4, 2018

Vancouver city councillor Adriane Carr. Gerry Kahrman/PNG

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The City of Vancouver continues its rush to rezone city-wide without a prior public consultation process, counter to standard practice. Their clear objective is to push everything through in advance of the civic election in October. Since most of the current council are not running for re-election, they are not accountable for the transformative changes. The many calls for these decisions to be made by the next council is falling on deaf ears.

On the heels of a massive number of reports brought to council in June, the last few weeks in July has proven to continue that trend while most citizens are away on summer holidays. After a break in August while council is shut down, the unprecedented number of public hearing dates reserved for September looks daunting.

The most substantial city-wide rezoning is of all the RS-zoned detached residential areas. Plus they are rezoning all the RT7 / RT8 character retention duplex zones in Kitsilano, mostly located north of Broadway and 4th Ave. to the waterfront. These both have now been referred to public hearings in September without public consultation.

The RS detached residential rezoning involves changes from the current three units that allows for rental secondary suites and laneway houses. New outright development would allow strata duplexes of four units, with secondary suites or lock-off units, with a much bigger footprint that goes deep into the rear yard. Currently, only if a character house is retained can more units and strata be considered, so with the proposal to allow outright strata for new, this will put more pressure on demolition and new redevelopment.

In Kitsilano north of Broadway (RT7) and north of 4th Ave. (RT8) zones, the current zoning allows strata duplex, but has incentives for retention of character houses and disincentives for demolition. This has successfully kept the character houses and streetscapes mostly intact while allowing more units and infill. The proposed new zoning would be an RT5 zone that was recently implemented in Grandview. It has gutted design guidelines and is easier to demolish character houses compared to the current zoning.

The move by the city is to ignore long-established community area planning. In Kitsilano, they spent five years of consultation to come up with their existing zoning that has been widely successful and supported by the community. That is being replaced with a new zone that the community has had no input in. The city’s shift is toward a cookie-cutter city-wide approach rather than neighbourhood based.

The Coalition of Vancouver Neighbourhoods, an umbrella group representing 27 residents associations, wrote to council against referral of these massive reports to public hearing, and to the policy to amend the Parking Bylaw, without a proper community consultation process.

Co-chair Larry Benge spoke to council on the many staff reports. He requested public input into any changes before referral to public hearing. Coun. Adriane Carr made a motion to that effect for the Kitsilano rezonings, but it was defeated. In the end, she was the only one to vote against referral to public hearing for the city-wide RS and Kitsilano RT zones based on a lack of public consultation.

Vision Coun. Heather Deal framed the public hearing as the public consultation. However, public input should be considered in making policy, not after the fact when decisions are already made.

To further allow more multiple units on each lot, a policy to amend the Parking Bylaw was approved last week by council that removes or reduces minimum parking requirements city-wide. Again without any public consultation.

The changes remove all minimum parking requirements for new developments in the downtown, excluding the West End which has its own plan. Changes also reduce or eliminate onsite parking requirements citywide for any new developments, subject to a traffic demand management plan, such as being close to transit.

But this would put tremendous pressure on street parking. Likely tenants and owners will lose the rights to street parking in front of their homes and will be replaced by area-wide pay permit parking. Coming to your neighbourhood soon.

Groups representing residents, seniors and the disabled all spoke in opposition. For many people it would significantly limit where they could live if their situation required a vehicle. For seniors and the disabled it may make the difference between living independently or in an institution.

Many people commute to work with transit but need a vehicle for family or personal use. Electric vehicles need to be off street so they can charge. Less onsite parking in new developments will eliminate options for the future conversion to electric vehicles.

The policy changes to the parking bylaw were approved and then are to go for consultation to the seniors and persons with disabilities after the fact when policy is already set. A backwards process.

These are transformative city-wide changes. Yet citizens have been shut out of the planning process, a reversal of standard practice. Vancouver used to be a world leader in public participatory planning processes. Well not anymore, apparently.

The issue about why consultation is important has become a hotly debated issue at council and for the upcoming civic election. Many point to the influence of developers in this shift to little or no public consultation. A July 19 poll by Mario Canseco shows that 57 per cent of respondents feel the influence of developers has gotten worse.

But even many designers and developers are concerned about this shift in consultation. It really isn’t working well from many angles.

What we are seeing is a knee jerk reaction to a housing crisis that is substantially of their own making. Rezonings will increase land speculation and demolition that adds to unaffordability and loss of neighbourhood character. Further increased demands on parking and services are met with reduced requirements that undermine livability.

There was a solution in the character house zoning review that completed last fall. Unfortunately it was a lost opportunity. The proposal was originally to allow incentives for character house retention in forms of more units and development potential, with disincentives for demolition like in the RT zones, such as lower outright and conditional increased square footage for retention.

Instead we are getting wholesale destruction of the remaining character of the neighbourhoods. This all needs to be reconsidered.

We could have it all: community involvement in planning processes; character retention; more rental and ownership units; opportunities for more affordable housing types; more affordable transit options; and an affordable livable sustainable city. Let’s do that instead.

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Property surcharge against municipal interests

B.C. property surtax undermines municipal tax base

By Elizabeth Murphy, Business in Vancouver, July 12, 2018

Graph source: Metro Vancouver report 2016.

The B.C. provincial government’s proposed property tax surcharge encroaches onto the municipal tax base.

The B.C. take of 40% will increase to 70% and more as it escalates on higher-value properties. This precedent-setting tax grab also makes life less affordable for both owners and renters, so it needs reconsideration.

Property taxes are the main source of revenue for municipalities to cover civic services. But rather than using its own provincial tax base, such as the progressive top bracket of income taxes, the government has chosen to impose a new surcharge on property taxes. It is a provincial tax grab of the municipal tax base. Continue reading

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Rezoning increases the divide

Outgoing Vision council doing ‘chainsaw massacre’ to city zoning without public consent

By Elizabeth Murphy, Vancouver Sun, Monday, July 2, 2018

City of Vancouver maps from 2016 show how ‘hot’ properties that inflated beyond the average are distributed across the city. They closely reflect the areas of the city that have undergone planning programs for increasing density and the resulting speculative inflation.

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The City of Vancouver passed reports at council last month to rezone across the city without public consultation. As this council’s failed decade of policy has shown, rezoning inflates land values, which is at the root of the affordability problem. Proposed actions to be considered in July will just make this worse as it further increases the affordability crisis they claim to be resolving.

With only three business days to respond, the public got their first look at 680 pages of major policy documents proposed for approval. This posed a challenge for even the most dedicated policy wonks and impossible for the public on such short notice. These included rezoning across the city in all RS (detached) and RT (duplex/infill) zones to multi-family under the Housing Vancouver strategy and Making Room reports, as well as a planning program for the Broadway corridor.

Although most of this council aren’t running for re-election in October, the first referrals to public hearing were approved for July 18, followed by major reports for July 25. They seem determined to ruin what is left of this city as they run for the exits with most of the rats jumping ship.

Current policy programs have resulted in massive land-value inflation. City of Vancouver maps from 2016 show how “hot” properties that inflated beyond the average are distributed across the city. They closely reflect the areas of the city that have undergone planning programs for increasing density and the resulting speculative inflation.

Land inflation is clearly concentrated in the Cambie corridor, east side, downtown peninsula and the Broadway corridor. These are all areas where significant new density has been signalled by the city. Rezoning has been central to the rise in real estate prices that fuels the affordability crisis. The older, more-affordable stock is demolished to be replaced by much more expensive new development, both for ownership or rental. Foreign capital has further escalated this cycle.

This has suited the development industry that controls council and will continue to do so as gaping loopholes for third-party campaign funding still remain. The province hasn’t removed big money from civic elections, just made it even darker and less accountable than it was before.

Funding from developers flows into third-parties like Generation Squeeze that promotes rezoning and B.C. surtaxes benefiting industry while undermining affordability for everyone, including the millennials they claim to represent.

The city knows that they have been approving new housing supply at record rates beyond the growth in population. This has been reflected in census data and the Regional Growth Strategy. It has been further confirmed by the city’s consultants and director of planning that the existing zoned capacity is well beyond what is required to meet the city’s anticipated growth for 2040 and beyond.

The city concedes that it isn’t about adding more market housing, but about adding more of the “right” supply that needs to be more affordable. But the proposed measures will not achieve this for a number of reasons.

First, let’s look at the Broadway corridor planning program. It includes the area from Clark Drive to Vine Street, two blocks west of Arbutus Street and 16th Avenue to First Avenue. The city tries to limit land speculation by showing industry how much it intends to take for significant public benefits. But this is typical of what the city did on the Cambie corridor by taking 75 per cent of land from rezoning, yet we all know how that turned out.

And as you can see from the 2016 maps, the horses have left the barn on the Broadway corridor, with significant land speculation and inflation already in play all along the corridor to the University of B.C. But the city is putting on quite the show to make it look like they’re doing something different.

In reality, they’re still putting a big bull’s eye around every station to show developers where to aim. Having most of the public-transit funding for the next generation in one, expensive, five-kilometre subway corridor means the rest of the city and region will be starved of transit infrastructure. This is mainly to subsidize the developers who will benefit in this scheme.

A more affordable and sustainable option would be to expand an improved transit network throughout the arterial grid with electric trolleys and trams at a fraction of the cost of the short subway to nowhere. The City of Vancouver was originally designed as a streetcar city so everywhere is within a 10-minute walk to an arterial. We don’t have to substantially rebuild the city to be transit oriented. Just bring the transit to the people.

To illustrate, a victim of current practice is Matias, who immigrated from Argentina 17 years ago. As an Industrious young man, he rented on the east side near the 29th Avenue SkyTrain Station and started his own small business, doing truck deliveries that also provided employment for others.

But as the planning program to rezone the area took hold, development pressure forced up rents, eventually pricing him out of his modest, main-floor rental suite in 2015. As he explained his situation, I was expecting him to say how he was forced out of the city to New Westminster or something like that.

But, no, he discovered the low-rent, older-apartment districts on the west side, such as Kerrisdale. There he found a large, older apartment for much less than what he was paying on the east side, where planning and rezoning were driving speculation and displacement. Except, of course, for the monster-house invasion, he said he was finding affordable pockets in other west-side neighbourhoods such as Kitsilano, West Point Grey and Dunbar that had older, character, more-affordable rental suites.

But not for long.

Demolition of our character neighbourhoods will escalate with proposed policies to rezone the entire city, both east side and west side, again inflating land values. There has been no public involvement, only industry and insiders. The reports recommend moving away from neighbourhood-based planning to city-wide zoning without nuance of place. Directions include gutted design guidelines and reduced or eliminated on-site parking requirements, with permit parking expanded citywide.

Kitsilano’s RT7-RT8 is proposed to add even further infill units on small lots to an already-dense, multiple-units-per-site area. All RS detached zoning is to become outright strata duplexes, with larger laneway houses that will not be affordable. All will be yet more incentives for demolition of character houses.

Then at the last minute, after all speakers and questions to staff, Mayor Gregor Robertson adds a motion to include multiplexes — triplexes, fourplexes and more — to all RS and RT zones citywide. The public has no idea what that would look like until July 25, when staff are to come back with referral to public hearing for the whole program of rezoning across the city. No consultation of neighbourhoods, just a mad rush to rezone before the election.

Architect Larry Benge, representing the Coalition of Vancouver Neighbourhoods, gallantly spoke to council on all the reports spread over early morning to late that night. He expressed the need for neighbourhood-based public involvement in the planning process and the troubling move toward no public participation. When the public finally knows what is happening they will go ballistic, he notes.

What we need in Vancouver is some delicate scalpel surgery with informed consent, not a chainsaw massacre that murders the patient.

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Regressive Property Surcharge – The Georgia Straight

B.C. property surtax undermines cities and affordability

By Elizabeth Murphy, The Georgia Straight, June 14, 2018

The province of British Columbia introduced a property tax surcharge that is a substantial encroachment onto the municipal tax base. It is precedent-setting in how it is proposed to be applied and will make life less affordable for both owners and renters. The government needs to reconsider this.

Property taxes are the main source of revenue to cover municipal services. But rather than B.C. using its own provincial tax base, such as the progressive top bracket of income taxes, it has chosen to impose a new surcharge on property taxes. Although this is called a “school tax”, it is not about funding schools since it just goes to general revenue and is not based on a mill rate. It is a provincial tax grab of the municipal tax base.

Although the surcharge is currently proposed to only affect properties over $3 million, it has been strategically set at this rate to reduce opposition, while pressure is already building from some academics to adjust the threshold to $1 million. That would affect the entire city and most of the region.

Once a precedent is implemented, it would be much easier to expand the criteria to capture more properties. Property values have increased across the board, not just at the high end.

So while an ideological war on the “rich” is portrayed, the reality is that most average people will eventually be affected, including those who may not be affected initially.

The problem with property taxes is that they are not based on the ability to pay, so in that respect are regressive. Many of those affected are low income or average earners, who will be forced into debt or to sell. Deferral is a form of debt that requires a charge on land title to the benefit of the province, and not everyone will qualify. Continue reading

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BC Property Surcharge Town Hall Meeting

WPGRA Meeting on BC Surtax Presentation 

On May 27, 2018, the West Point Grey Residents Association (WPGRA) held a town hall meeting on the BC ‘school tax’ property surcharge, with MLA David Eby.

The Jericho Hill Gym was packed to capacity, including the upper balconies, at over 900 in attendance . With the exception of only a few people, the overwhelming opposition to this tax was clear. MLA David Eby committed to taking this message, including the proposed alternatives, back to the government and Minister of Finance, Carol James.

Main points often repeated by attendees:

  • Most cannot afford this tax.
  • Many cannot defer.
  • There are better options from the provincial tax base to cover needed revenue for schools rather than encroaching on the municipal tax base of property taxes.

The presentation by Elizabeth Murphy is here. BC Budget-Surtax-2018-Presentation

Copyright Elizabeth Murphy 2018 all rights reserved.  

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Proposed “School Tax” Property Surcharge

B.C. taxes need a ‘second look’

By Elizabeth Murphy, Vancouver Sun, Saturday, May 26, 2018

Graph updated June 13, 2018

Property taxes in the City of Vancouver are the highest in Canada, and if the proposed school-tax surcharge is added, it increases the amount substantially more, says Elizabeth Murphy, former property development officer for the city.

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Vancouver has the highest property taxes in Canada. The B.C. property-tax surcharge would further increase this burden and substantially encroach onto the municipal tax base. This regressive provincial tax grab will make life less affordable for everyone, both owners and renters. To understand this requires looking past ideological bias and considering the facts.

In the 1990s, a luxury tax was proposed on properties above $500,000. If that hadn’t been withdrawn by then-Premier Mike Harcourt, it would have eventually applied to all properties across the city and region, including most condos.

The proposed surtax is strategically tied to the $3-million mark to minimize initial impact of this precedent that, if implemented, will eventually be broadly expanded to capture all properties just like the 1990s’ version would have.

Everyone should be concerned.

The calculation of property taxes is very specific to each municipality. Property taxes are based on a mill rate. This is calculated by taking the total municipal budget and dividing it by the total assessed value of all properties in the class (such as residential).

With Vancouver’s high property values multiplied by the mill rate, the graph by Simon Fraser University Prof. Andrey Pavlov accurately shows that Vancouver has the highest property taxes in Canada.

In contrast, it’s misleading to compare mill rates and project them to unrelated values in other cities like what the University of B.C’s Tom Davidoff promotes, or the chart currently on MLA David Eby’s website.

A $2-million property in most other cities across Canada could be a new mansion on a large lot, whereas in Vancouver that could be an old character house on a standard lot on the east side. And most cities have few if any detached houses worth over $3 million, whereas Vancouver has most small old bungalows on standard lots on the west side in that range.

The proposed B.C. school-tax property surcharge has nothing to do with funding schools since it just goes into provincial general revenue and has no relation to a mill rate. This would be beyond the hundreds-of-millions of dollars B.C. already collects under the current school tax above the Vancouver school board’s budget that subsidizes the rest of the province.

This will leave little room for municipalities to raise necessary funding for municipal services since property taxes are their primary source of revenue. The municipalities with the highest property taxes like Vancouver and Toronto are also the cities with the most growth. Property taxes subsidize growth since only 10 per cent of the costs of growth are covered by development fees.

Municipalities across the region are raising concerns about B.C. encroachment into their municipal tax base. Several have made inquires to the minister of finance, such as the District of West Vancouver, Richmond and Surrey.

Implementing unaffordable taxes on unrealized capital gains that are unrelated to the ability to pay is against the principles of the Canadian tax system. Deferral isn’t justification. Not everyone qualifies for deferral and these programs may not be available or substantially restricted in future.

Deferral doesn’t apply on rental properties of three units and less, only on principal residences. Only rentals of four units and more are excluded from the surtax. So this means that owners of smaller rental buildings, which affects tens-of-thousands of rental units, would be driven to either try to recover this additional tax burden from rents, go into debt or sell. Many houses, especially in Kitsilano, have been converted to three-rental units or may have even more units that won’t be exempted if some units are unauthorized. These rentals could be caught by this surtax without the option of deferral.

It’s not accurate to assume that assessed value reflects either the owner’s ability to pay or the amount of equity they may have in their property. Even detached properties that have been owned for a long time may carry large loans for many legitimate reasons. Banks have different criteria and many people may not qualify for their financing with an increased tax burden.

This is really about neighbourhood clearing. It’s a predatory policy that benefits those who buy on speculation to assemble, develop or flip since property taxes are only paid for a short period of time and are the cost of doing business. Whereas a long-term homeowner would be paying year-after-year and these kinds of unaffordable taxes make ownership prohibitive to all but those with high incomes, even if they bought a long time ago.

It hollows out the diversity of neighbourhoods when longtime residents are pushed out and it certainly doesn’t mean that housing will become more affordable. Quite the opposite.

In Bob Rennie’s 2016 annual address to the Urban Development Institute (UDI) titled “We Have to Change the Narrative,” he went on to commend a new “Yes-in-my-backyard” (YIMBY) movement coming out of San Francisco that supported rezonings and claimed to represent millennials. He also pointed out the billions-of-dollars of equity that seniors have in real estate that could be soon available for reinvestment.

Simultaneously there were similar groups popping up in Vancouver such as Abundant Housing and Generation Squeeze that claim to represent the millennials and housing affordability.

Generation Squeeze is funded by UDI and Wesgroup developers. The kinds of new housing that is being promoted will not likely be affordable to millennials.

This surtax is supported by Generation Squeeze, encouraging millennials to “squeeze back.” Squeezing seniors out will not help millennials nor make things more affordable. It will only benefit speculators. But the nastiness being incited against seniors is disgraceful. It’s institutionalized bullying hiding behind academic independence.

Davidoff has tweeted his support saying, “I really hope that this tax encourages high-end homeowners to rethink opposition to up-zoning. I’m interested to see if there is such an impact.” Clearly one can see the real motivation here: developer profits.

The provincial government hasn’t thought this through. Harcourt is urging the government to take a “second look” at their latest surcharge on property taxes, like he had to do in the 1990s.

“All of the taxes being loaded onto property undermines the municipal tax base and makes life less affordable for everyone. It is regressive since it is not related to the ability to pay. The province should be using its own more progressive income-tax base,” he said. “Expanding school and housing programs is the right thing to do, but increasing property taxes is the wrong way to do it.”

There are better alternatives to raising needed provincial revenue. Financial analysis confirms that the $250 million that the budget expects to raise from the surtax could instead be raised by the top income-tax bracket for only a .25-per-cent increase.

This would mean someone making a net income of less than $150,000 per year would pay nothing. For someone earning net income of $250,000 per year they would only pay $250 ($100,000 at .25 per cent). Now that is affordable with the ability to pay, unlike this regressive surtax that would tax people out of their homes and affect renters too.

Policy based on ideology always leads to mistakes. This property surtax is one of them.

A chance to discuss these issues with Eby is coming up at the West Point Grey Residents Association meeting on May 27 at 2 p.m. at the Jericho Hill Gym. Unlike Eby’s cancelled event on May 1, there will be plenty of room for constituents to attend to learn the facts and make their opinions heard. Continue reading

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Canadian Property Taxes

Total Property Taxes Paid 

Based on MLS Detached Benchmarks

Updated chart June 13, 2018

City of Vancouver has the highest property taxes in Canada and the Province of BC is proposing to substantially add to this burden.

Update: Prof. Andrey Pavlov explains the facts

Property taxes are based on a mill rate. This is calculated by taking the total municipal budget and dividing it by the total assessed value of all properties in the class (such as residential).

The mill rate will be low if property values are high. But then the mill rate is multiplied by the assessed value of the property to determine the property taxes paid.

“Each municipality is unique,” explains Prof. Pavlov. “The mill rates are specific to each municipality, so taking the a mill rate from one city and applying it to another city’s unrelated property values is like comparing apples to oranges. It is a misuse of data.”

In the case of the City of Vancouver, the mill rate will be low because property assessed values are so high, but once this is multiplied out, based on MLS Benchmark detached prices, it is clear that Vancouver has the highest property taxes in Canada.

The graph above shows the base rates plus the utilities that are part of the total property tax bill for most recent figures of 2017.

“What matters is the amount of tax paid in each city based on their benchmark property values specific to that city,” said Prof. Pavlov. “Just looking at percentages alone is incorrect.” 

Note that the graph has been updated to allow for Toronto’s 4 year averaging and phase-in formula which substantially reduces Toronto’s assessed values that are applicable to property tax calculations.

June 13, 2018 update: The graph has been updated to reflect 2017 property tax data and the MLS Benchmark to reflect the typical July 2016 market value used for assessments.

Property tax rates are still from the Altus Group Report (linked below). City of Vancouver benchmark is an average of the East and West side detached benchmarks as reported by the REBGV. City of Toronto benchmark is as reported by TREB. The Toronto-Central benchmark is an average of the benchmarks for the included neighbourhoods. Benchmark prices for Calgary, Edmonton, Montreal, Ottawa, Regina and Saskatoon are for each region as reported by CREA.

May 29, 2018 update: To clarify, the Benchmark values are based on detached properties since that will be the most likely affected by the proposed surtax change, so is most relevant for that property type.

Incorrect blog posts have been publishing inaccurate assumptions about Prof. Pavlov’s work. They have been notified of this, but at this time have yet to correct these incorrect assumptions. His detailed explanation is below in reference documents.

A further update May 15, 2018 below shows the breakdown of the split in Vancouver / BC portions of the property taxes collected.

This has been then adapted to reflect the new “School Tax” property surcharge that shows how the province will be taking the vast majority of the property tax base if this tax is implemented.

Clearly the Province of BC is proposing to substantially encroach on the municipal tax base if this surtax is implemented. All municipalities should be concerned. District of West Vancouver, Richmond and Surrey have already been talking to the Ministry of Finance.

For BC to take this much of the property tax base will substantially limit municipalities’ ability to raise revenue to pay for civic infrastructure and services.

Further update May 24, 2018 confirms that the City of Vancouver no longer does 3 year averaging of assessments for all residential properties. Now it is only targeted for “hot” properties. See links to Council reports below.

References:

City of Vancouver Changes to Property Tax Averaging

March 9, 2016 Agenda: http://council.vancouver.ca/20160309/cfsc20160309ag.htm

Report: http://council.vancouver.ca/20160309/documents/cfsc4.pdf

Staff Presentation: http://council.vancouver.ca/20160309/documents/cfsc4presentation.pdf

Altus Group: Canadian Property Tax Rate Benchmark Report 2017 https://www.altusgroup.com/wp-content/uploads/2017/10/Canadian-Property-Tax-Rate-Benchmark-Report.pdf

The utilities information was from the City of Vancouver and Toronto. http://vancouver.ca/home-property-development/flat-rates.aspx
https://www.toronto.ca/services-payments/recycling-organics-garbage/houses/garbage-bin-sizes-fees/

The Benchmark property values are from the Canadian Real Estate Association (CREA). https://www.crea.ca/housing-market-stats/mls-home-price-index/hpi-tool/

MLA David Eby’s webpage shows a graph that is not accurately portraying tax comparisons since it neglects to compare Benchmark property values in each city. Other cities across Canada have much lower property values than Vancouver and why the mill rate is so low, because the Vancouver property values are so high. The chart on David Eby’s website is therefore very misleading and inaccurate.

Prof. Andrey Pavlov clarifies his assumptions and data that have been incorrectly applied by others on a blog post. https://twitter.com/andrey_d_pavlov/status/1001311281243017216

Copyright Elizabeth Murphy 2018 all rights reserved. 

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BC Property Tax Surcharge

B.C. undermines municipal tax base and affordability

By Elizabeth Murphy, Vancouver Sun, Saturday March 9, 2018

Life is made less affordable for owners and renters by provincial encroachment into the municipal tax base.

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The province recently introduced their budget, the first, full-year budget for the new NDP government. They claim it “puts people first, makes life more affordable for British Columbians.” Although there are many aspects to the budget that are a welcome shift from the previous administration, the proposed provincial infringement into the municipal property-tax base is particularly problematic.

There are a number of valid measures to curb foreign speculation and capital used to purchase real estate where provincial income taxes aren’t being paid. These concerns are now addressed in this budget through new and expanded taxes and enforcement that are long overdue. The devil is in the details of how this will be implemented, but not the focus here.

It’s the provincial increase in the school portion of the municipal property tax that works against the objective to make life more affordable for British Columbians. The main problem with property taxes is that they’re not related to a citizens’ ability to pay, such as a person who bought their home a long time ago and is on a fixed or low income.  

The surtax is posed as a luxury tax, but the reality is that it includes many older character houses that are certainly not luxury properties, nor are most owners with million-dollar incomes. New houses may have owners who are more likely to have a larger income to support more taxes, but that doesn’t justify the province to encroach on the municipal tax base.

Under the new measures, properties valued at higher than $3 million will be subject to an additional 0.2-per-cent tax on the value between $3 million and $4 million (plus $2,000), and 0.4-per-cent tax on the assessed value over $4 million (plus $4,000 per million), beginning next year. These are no small numbers and add up quickly.

This annual increase is on top of the tens of thousands of dollars that many currently pay in property taxes every year and, for a principal residence, are based on after-income-tax dollars. The increase is only the tip of the iceberg if the province gets away with this precedence of infringement into the municipal tax base meant for civic services.

Currently, the provincial school tax has crept up to about 35 per cent of the property-tax bill, plus about eight per cent for TransLink. With the new added surtax, the provincial take is in some cases to triple or more, and isn’t based on a mill rate, but directly on assessed values, a first of its kind. Citizens and  municipalities should be very concerned.

Property taxes are the primary tax base for municipalities to pay for civic services, with the province continually pushing to infringe on that tax base. The previous B.C. Liberalgovernment was pushing to use property taxes and development fees to pay for the provincial responsibility of transit, which the Mayors Council has been resisting.

Now the NDP government is going after property taxes through a huge increase to the school tax. Schools are a provincial funding responsibility, mostly through provincial general revenue. This surtax is siphoned off the municipal tax base and swallowed up by the insatiable provincial whale. There is no evidence that schools in the jurisdiction that the surtax is collected will benefit directly from it, nor the school system specifically. General revenue has a way of moving around as priorities shift.

Darlene Marzari, former minister of municipal affairs with the previous NDP provincial administration, has seen this all before.

In the mid-1990s, the province under then-Premier Mike Harcourt tried to impose a “luxury” property-tax surcharge that primarily affected the west side. There was a huge public pushback, including threatening the seats for both Harcourt and Marzari, until the proposal was withdrawn. If the surtax had been implemented, land-value inflation would have meant that in only a few years the surtax would have applied to properties across the city and eventually the region.

Marzari says this current proposal is “the encroachment of provincial jurisdiction into municipal authority and the direct percentage ‘take’ of cash from the assessed value rather than using a traditional mill rate to fulfil the civic budget. It will tax people out of their homes and threatens the NDP’s narrow majority backed by the B.C. Greens, especially for (Attorney-General) David Eby’s riding.”

Like in the 1990s, if this surtax proposal is implemented, it will eventually affect all properties across the city as property values increase over time.

The premise that if an owner can’t afford the large property-tax increases they can always defer their taxes, is setting up a system where the only options for most owners is to either go into debt or sell. Property taxes are part of the costs that affect affordability, along with utilities and mortgage payments. Taxes shouldn’t be punitive or impossible for incomes to cover.

Income taxes on the other hand are spread over a much larger tax base that the province has jurisdiction over and is based on the ability to pay. Under the B.C. Liberals, they tried to keep income taxes very low so they had boasting rights as a low-tax jurisdiction, but in fact they were just shifting the tax burden to fees and surcharges that hits those with lower incomes the hardest.

This property surtax is a similar maneuvre. However, a small increase in income taxes, based on the ability to pay, can generate significant additional revenue for schools and other programs. The issue of non-residents buying real estate and not paying income tax is being dealt with in the other tax measures the province has proposed and beyond what general property taxes that affect locals can achieve.

The unintended consequences of the property-tax surcharge hasn’t been thought through. They have already had to exempt multi-family rentals of four units and more after pushback by the rental industry. Increased taxes would have been passed onto tenants. But so to for houses divided into two or three suites, so what about them?

Property taxes should be affordable to people and not punitively forcing people into debt. Taxing people out of their homes isn’t making life more affordable for British Columbians. And the provincial encroachment into the municipal tax base undermines the cities’ ability to provide the civic services that property taxes are intended for. Continue reading

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Supply-side Development

City of Vancouver needs treatment for its overbuilding addiction

By Elizabeth Murphy, Business in Vancouver Magazine, December 1, 2017

The City of Vancouver has finally admitted that it has an addiction problem. The addiction is increasing density through rezoning that has been inflating land values. Along with large speculative inflows of capital that treat housing as a commodity rather than a home for people who live and work here, this has created an affordability crisis. Continue reading

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Community Planning

Vancouver’s housing strategy needs a rethink

By Elizabeth Murphy, Vancouver Sun, Monday, November 27, 2017

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The City of Vancouver has an addiction. Like all addicts, the first step is to admit they have a problem. The city has finally taken that step.

The city’s addiction is to increasing density through rezoning that has been inflating land values. Along with large speculative inflows of capital that treats housing as a commodity rather than a home for people who live and work here, this has created an affordability crisis. It is positive that for the first time, the city has finally made this admission as part of the new housing strategy going to council this week.

Unfortunately, typical of an addict, the city’s solution to this problem is to increase the addictive substance. They claim that if they increase density and housing supply — this time, the right kind of supply — affordability will get better. This is unlikely for a number of reasons.

The city’s addiction is not like drugs or alcohol that one can stop all together if one chooses. It is more like an eating disorder in which one must learn how to eat healthily and in smaller quantities. In many ways this is much harder to achieve.

So the city may have taken the first step to recovery, but the plan is flawed. What the city needs is the civic equivalent to Overeaters Anonymous, such as Overbuilders Anonymous.

The problem for overbuilders is that they are stuck in the supply-side dogma that has proven to be a complete failure. This is promoted by the industry and special interests who benefit directly and up to now have also funded government election campaigns. Now that the province has banned corporate and union campaign donations this is about to change.

The supply-side dogma has been recently countered by Dr. John Rose, an instructor in the department of geography and environment at Kwantlen Polytechnic University.

He used data from the Statistics Canada censuses and the Demographia Survey House Price Data, and he also looked at supply in housing markets elsewhere in Canada, the United States and Australia for reference.

Dr. Rose went back to the 2001 census, covering a 15-year span where he found that for every 100 households that were added, Metro Vancouver added 119 net units of housing.

According to census data, there are 66,719 unoccupied dwellings in Metro Vancouver. Yet despite this huge overbuilding of housing supply, affordability has significantly worsened.

This is a trend that I and others have been writing about since 2007. It is not new, but has been escalating over the last few years to the point it is finally getting mainstream attention and affordability has become the main election issue at all levels of government.

Most of the demand-side issues are under the provincial and federal jurisdiction. The city has few tools to address this, and as proposed, the city’s plans will be of minor influence.

The area where the city does have influence is on the supply-side speculation created through increased density and rezoning. Although the city is attempting to incorporate some measures of affordability, it is unlikely that these will be effective.

It is impossible for the city to talk down market land values. We have evidence of this already in the Cambie Corridor where the city has attempted to take 75 per cent of the increase in land value from rezoning as development charges, yet speculative land inflation has flourished.

To negotiate affordability into market projects will result in large projects that will be out of scale with the surrounding communities. This precedent of larger scale, with or without affordability, will further inflate surrounding land values as speculators’ expectations rise.

The proposal to increase upzoning to allow new construction of townhouses, row houses, multiplexes and apartments in areas currently zoned for single detached homes will inflate land values since redevelopment and assemblies are encouraged. This will undermine the incentives for character house retention and ensure more unsustainable demolition.

Character house incentives and multiple conversion suites can provide more affordability over the vast 60,000 single-family-zoned properties, with much less inflationary impact, while providing more rentals, some ownership, and mortgage helpers. New construction townhouse and multiplex units are often just as expensive as a bungalow with a secondary-suite mortgage-helper.

These proposed upzonings are likely to undermine affordability rather than solve it. Yet allowing more secondary suite conversions rather than shutting down unauthorized ones is not a priority action of the proposed housing strategy.

The large scale upzoning is proposed to be city-wide rather than neighbourhood-based. This will undermine local context that was provided through CityPlan and past local area planning that gave direction as to how each neighbourhood could support future growth. Each neighbourhood is different and should be dealt with according to its unique character to protect the diversity of the neighbourhoods.

The city is also looking at a design competition for what appears to be a new “Vancouver Special” type of housing. They are looking for a multiplex that could be copied like a cookie-cutter on standard lots. This will result in massive amounts of demolition of the last remaining character houses and destroy streetscapes.

There are a whole list of proposed tax changes in the housing strategy that are out of civic jurisdiction. Some seem fair, but others could have unintended consequences that greatly impacts local owners.

Tying property tax surcharges to income tax reductions would mean that only those with high net income can afford to live in homes that they may have owned for many years. Not all owners of expensive homes have high incomes, often for legitimate reasons. The city is even proposing to limit the current property tax deferral program. It seems heavy handed, and people could be taxed out of their homes.

Generally, many of the city’s proposals are for things that are out of its own jurisdiction, or supply-side increases of overbuilding that will not work to make things affordable since they increase land inflation. We know that Vancouver already has more existing zoned capacity than is required for decades of future growth.

So the time has come for Vancouver to address its overbuilding addiction by moving away from supply-side dogma. We need a new way to plan for a truly sustainable future that benefits the people who live and work in the city.

 

Continue reading

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Britannia & community centres city-wide

Parks and recreation system under threat

By Elizabeth Murphy, Vancouver Sun, Saturday September 30, 2017

Britannia school and field, part of the community centre complex. Elizabeth Murphy

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The manufactured consent coming out of the city and Park Board bureaucratic machines has intensified over the last month as they take aim at the parks and recreation systems.

Britannia Community Services Centre is being targeted for housing. Meanwhile, community centre associations are being forced into a new agreement many consider a shotgun marriage that undermines independent community involvement in programming in favour of centralized controls. The community centre associations and the independently elected Park Board stand in the way of the city’s access to these lands for a similar housing fate as now being considered for Britannia.

Vancouver’s parks and recreation system cannot solve the housing crisis. Opening up these large historic sites to housing will mean the public open spaces and amenities that make the city livable will be encroached upon just when increased density throughout the city puts more demand on their use. Many neighbourhoods are already underserved for parks and amenities. This would make it worse.

First, some background on Britannia. Located in Grandview near Commercial Dr., it is a large site that was put together in the 1970s under the Dave Barrett NDP government that recognized the community was drastically underserved for services.

They cleared the site of 77 expropriated houses that were demolished or relocated. The high school, elementary school, community centre, library, rink, pool, track, fields, courts, playgrounds, were all put on one large 17-acre site. It is a fabulous model of combined services.

Darlene Marzari, B.C.’s Minister of Municipal Affairs at the time Britannia was created, says: “Britannia should be protected to serve the community without further encumbrances of housing in an already complex management structure.”

To see where the future of city-wide facilities are going, all one has to do is look at what transpired at Britannia last week. The city held a housing forum with a presentation from the housing department’s Dan Garrison setting the context.

Garrison gave an account of the recently approved Grandview Community Plan. His version ignored most housing options that came out of the plan and presented it as if only Britannia and one small site on Hastings St. were identified for new affordable housing potential.

Ignored was the controversial Boffo Development tower at Commercial and Venables that includes housing for the Kettle Society. None of the apartment zoning that was added to or expanded counted either. Industrial land in the recent False Creek flats plans allows some affordable rentals, and could also extend past Clark Dr. up to beside Britannia, but is not an option either.

Only the Britannia site, apparently, is an option to solve the insatiable demand from the housing crisis.

So here we have it. The future use of our public community spaces — open parks and recreation areas are treated as empty lots waiting for housing development.

This is the context for the current negotiations with community centre associations (CCAs) for a new operating agreement. These are the historic associations that have served as a means to ensure community involvement in community centre programming.

Some associations go back 70 years, with many also building the community centres, either in whole or in part. It was this potential trust interest in the facilities that landed the city in court when former city manager Penny Ballem tried to disband the CCAs in 2012.

This was an initial step toward a city takeover of the Park Board. Ballem transferred the Park Board facilities over to city management under the Real Estate and Facilities Department, where they remain today. Even the elected Park Board was also at risk of being dismissed. However, with Vision losing control of the Park Board in the last election, a new process was initiated with the CCAs. The question is how much has really changed.

Park Board Chair Michael Wiebe said: “We continue to want what’s best for our communities, which is something that most of us campaigned on. It’s the reason most of us are here and why we fought so hard to join the (joint operating agreement) process, during which time we tried to create a more transparent process that was built on respect. We all understand that the process wasn’t perfect yet we were to find solutions that could work.”

But this message doesn’t seem to be reflected at the Park Board meetings or getting through to how staff is implementing the process. An arbitrary deadline of Sept. 30 has been set for CCAs to sign this new joint operating agreement. Staff are wielding this date with threats of potential legal action as a weapon.

Recently, 12 of the 20 community centre associations sent a joint letter to the Park Board saying they are not comfortable signing the proposed joint operating agreement by the deadline. Only three have signed to date of writing. Yet staff are presenting a shotgun effort to force the execution of the proposed agreement.

The Kerrisdale Community Centre Society had a large meeting of 496 members of which 97 per cent voted to reject the proposed joint operating agreement. This is anything but a done deal. Most CCAs are opposed, still negotiating, or in the courts.

Forcing a false signing deadline when they are clearly not ready is no way to rebuild trust. Many CCAs are asking for an extension.

Donnie Rosa, director of recreation at the Park Board, sent messages to the associations saying the issue would be dealt with at the next Park Board meeting on Oct. 2. In fact, a report will not be considered or direction given until Oct. 23.

Wiebe said: “No actions will be taken on (joint operating agreements) until after the meeting and direction is given from the commissioners. I want to see us work toward a place of understanding on how to move the (agreements) forward.”

Contrary to statements by Rosa, the fact is that moving away from the 70 year collaborative relationship between the CCAs and the Park Board towards more centralized control, is not necessary to provide more city-wide access.

Most centres have already been doing this, first through the Flexipass in the 1990s that since folded into the One Card. Some CCAs , such as Mt. Pleasant, already offer subsidies for low income people. Most CCAs are fine with sharing some resources with those who need help and agree with the principle of providing access for everyone.

Hardball antics by staff or the board are not necessary nor helpful. Centralized control on Park Board land is mainly so the city can implement its shifting priorities.

An independent elected Park Board is very much tied to a strong community centre association system. Hopefully the Park Board will re-establish a collaborative community relationship based on trust, before it is too late.

All levels of government have contributed to creating the housing crisis and they are all responsible for turning it around. But our parks and recreation system is not real estate assets to be developed for housing. That is no solution. Continue reading

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Parks, community centres & schools

Are amenity spaces destined to become housing development sites?

By Elizabeth Murphy, Vancouver Sun, Saturday September 9, 2017

Parks and schools open green space are irreplaceable and become even more important as the city densifies.

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Vancouver is designed to have neighbourhoods with parks, community centres and schools on large historic sites that make communities walkable and sustainable. These amenities and open green spaces will become even more critical as the city densifies over time, as they are the heart and lungs of the city.

However, rather than being protected, they are increasingly under threat of being sold or redeveloped for housing. Astonishingly, we are moving in this direction now.

Vancouver is unique in its independent Park Board structure. This has served us well since it has ensured that publicly elected park commissioners have been in control of parks and recreational lands, facilities, programming, and revenue. It protects the park system from being undermined by the shifting priorities of City Hall.

The Park Board had its own planning and facilities department that up until only a few of years ago controlled all parks facilities, including community centres, pools and ice rinks. Now, these facilities are managed through the city’s Real Estate and Facilities Department. The Park Board only manages programming, no longer the facilities themselves.

Park Board chairman Michael Wiebe has requested a review of shared services, including facilities management. He said, “This is very important to commissioners as we have seen our service levels drop with little controls to resolve it.” 

Recently, city council approved a shift of Development Cost Levies (DCLs) from parks to housing, reduced from 41 per cent to 18 per cent. DCLs fund growth-related capital improvements and expansion of parks of about $10 million to $20 million annually.

The community centres for each neighbourhood have associations (CCAs) that were established decades ago. These are independent community-run boards that have been in collaborative operating agreements with the Park Board, and that in some instances actually built the community centres in part or in whole. This arrangement has worked smoothly with few exceptions under the current joint operating agreement (JOA) established in 1979.

That was until former City Manager Penny Ballem tried to centralize city control over the community centres. This resulted in some of the CCAs taking the city to court, claiming they had a trust interest in the community centres since the CCAs built or renovated them. The negotiation of the new JOA continues to be controversial.

Having community-run centres under the association structure has ensured that the centres are managed in a way that best reflects the needs of the neighbourhood. They also protect the centre and the surrounding park land from City Hall interference and would make it harder for the city to undermine the elected Park Board’s authority.

But under the new proposals of the JOA, it would substantially undermine the collaborative structure that worked so well in the past. It also would make it easier for the city to disband the CCAs or even to eliminate the Park Board altogether. The Park Board’s future is very much tied to the ongoing success of the CCA relationship.

The most recently approved version of the JOA still includes a fundamental shift away from a grassroots, neighbourhood-based model and instead centralizes more power with the city. The JOA no longer has defined neighbourhood boundaries of where the community centre is serving. Also, the jointly operated facilities are no longer defined to include the building and property surrounding it, only those areas inside the building identified room by room, closet by closet. It is overly complex and difficult to administer compared to the existing JOA.

Joslin Kobylka, former Park Board area manager for the northeast quadrant, supports the collaborative community services model with engaged CCAs. Her experience was that the model worked very well with few exceptions that could easily be managed. “There is no real need to centralize city control on community centres in order to provide some city-wide programs and funding equalization. These could be accommodated through the current collaborative management structure,” she said.

There is a bigger-picture shift in play that is in part the motivation behind centralizing city control over the community centre facilities and revenues. The city has been moving toward using parks and recreation sites for development of social or mixed-market P3 housing. This is difficult to do without centralization.

Yes, we have a housing crisis and we need more social housing. But taking existing public amenity sites and converting them to housing creates a loss to communities that are often already park- and amenity-deficient.

This should be differentiated from new small sites on commercial streets such as the Strathcona library that was recently built in a new storefront with housing above. Same with the Mt. Pleasant community centre and library at Kingsway and Main that is also a small new storefront property that has housing above. These did not remove existing historic public amenities. They added new small sites in an urban context.

Raycam in Strathcona is another example of an appropriate location for housing since it is already a housing site that is owned by B.C. Housing in partnership with the community, including a community centre.

An inappropriate location that is being considered for housing is the large historic amenity site of Britannia in Grandview. This large, 17-acre site was assembled in the 1970s to integrate the high school, elementary school, community centre, library, pool, and ice rink. Housing was moved off the site to make way for a track, fields, ball courts, open and green space, and all these public amenities in one large site. Adding housing would reverse these efforts and undermine the special role this site plays in the community.

Darlene Marzari, a former city councillor and B.C. Minister of Municipal Affairs, was involved in creating the unique Britannia facilities. She emphatically agrees that although we need more social housing in the city, using our amenity parks, recreation and school lands for this purpose is a huge mistake.

“Britannia was created through a collaborative process with the community and multiple levels of government. It should be protected to serve the community without further encumbrances of housing in an already complex management structure. This site and our other historic parks and schools across the city must be protected from change of use to housing,” she said. “We need a strong social housing program implemented outside of these sites where it is appropriate.”

Having a strong and independent Park Board, School Board, community centre associations, and collaborative civic and provincial governments are essential to protect the public park and school sites from being converted to housing, privatized or sold. We have an obligation to retain these irreplaceable public spaces for future generations. Continue reading

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The Vancouver Special

‘Vancouver Specials’ offer many lessons

By Elizabeth Murphy, Vancouver Sun, August 23, 2017

The Vancouver Special, centre right, would have replaced a demolished character house, such as the house on the left that is converted into multiple units. Elizabeth Murphy

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The infamous “Vancouver Special” house has had a profound impact across the city, especially on the east side. It is important to put some context to where it came from and lessons applicable to today.

Builders developed them on spec for immigrant families in the 1960s and ’70s. But Specials were broadly detested because they were large, sprawled across the lot, ugly and resulted in the demolition of character houses that destroyed the streetscape.

The Special was credited for being easily converted to two units. However, the original character houses had future potential to be converted into multiple suites and infill that Specials couldn’t achieve since they sprawled over the rear yard. So the original character house wasn’t just more attractive and made of superior materials and craftsmanship, but also could accommodate more future growth.

Construction costs of the Special were reduced by stripping out everything that was unnecessary beyond basic building-code requirements. It maximized the floor-plate size to build the largest house possible within the allowed setbacks without having to build either a below-grade basement or a second storey. Up to 1974, the area of the lower floor wasn’t counted if it was one foot below grade. So the earlier versions of the Special took advantage of this option with another storey above. Later, versions were the same except slightly smaller with a slab-on-grade entrance.

This meant that most of the lot was covered by the house, which eliminates the option for a laneway house. Even more so when the garage or carport was attached at the back and the rest of the lot was a paved driveway.

Finishes were the least expensive possible, such as stucco, aluminum windows, no trims, no porch, with a little brick in the front facade. The roof was at the minimum slope to shed water.

Why would anyone create housing so lacking in design taste that it was considered hideous and reviled by most people? To understand the origins of the Special, it helps to understand the man behind it, Larry Cudney, my stepfather.

He originally was training to be an architect, but had a falling out with the company he was interning with. Without architect certification, he was limited as a draftsman to working only on single-family houses. So he started his own drafting service called Prana Group.

A client spec-builder came up with the house concept that Cudney drafted into what became his Vancouver Special stock plans. He could provide permit-ready drawings at an extremely low price of about $50.

Creating a completely tasteless form of housing was his revenge on the architect profession with which he was in conflict.

But it was more than that. It also reflected his general miserly approach to living. To be blunt, the man was cheap and proud of it, living well below his means. For example, he once bought a second-hand suit for 75 cents and proudly wore a price tag on his lapel to make the point. He gave us “Second Hand Santa” at Christmas, with only gifts he found at the thrift store. He ate at MacDonald’s whenever he could. You get the picture.

Although reusing second-hand items was a sustainable option, he unfortunately didn’t take that approach in his buildings. It was more like the equivalent to the fast-serve, junk-food approach.

How he managed to charge so little for his services is that he cut his costs to the bone. He had low office rent by locating at Main Street and East 33rd Avenue. When that got a little too expensive for him in the 1970s, he moved to Fraser and East 49th Avenue.

He also worked from a home office and employed his children part-time. When I was 11 years old I started printing copy sets from the big ammonia printing machine he had in our rec room, with the ping-pong table for layout. Friends thought we washed our windows a lot since the house always smelled of ammonia. Into my early teens I was helping amend his many stock plans using basic drafting skills. It beat babysitting.

It wasn’t until we moved back to Vancouver a few years later that I realized what I had been working on. There were so many of these detested Vancouver Specials that had replaced beautiful heritage houses. I was horrified. How wasteful to be demolishing these livable superior houses that just needed updating.

However, I also have been encouraged to see that many of the Vancouver Specials are now being updated for current use. Although they were so reviled, many young families are now buying them and renovating. So they’re now becoming quite a popular option, even trendy, contrary to the Special’s original intent.

Cudney said he wouldn’t design “a big stupid house as a monument to someone’s big stupid life.” Ironically, he designed the biggest houses allowed under the rules that sprawled as much as possible over the lot. Indeed “a big stupid house.” But he actually took pride in the fact that Specials were ugly and disliked.

The Vancouver Special ended in about 1976 when Cudney retired, due in part to glaucoma. But with each passing decade the builders’ ‘specials’ have become increasingly larger.

In the 1980s there were the pink-stucco “monster” houses. This was stopped through conditional zoning changes and design guidelines. But in 2009 those provisions were reversed and now we have even bigger, “luxury” monster houses with faux stone and tile facades.

Design guidelines and conditional zoning are essential to prevent this. As the city moves to revise zoning to incentivize character-house retention, it’s important to remember the lessons of the Vancouver Special.

For almost every Vancouver Special built there was a character house taken down. That character house had higher-quality craftsmanship with potential for conversion to more units or infill, even more so than the Special. Demolishing these character houses was pointless and wasteful.

We can have more affordable-housing choices and still meet design and livability objectives. Continuing poor-quality, new, builders’ ‘specials’ should be avoided. Continue reading

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STIR Resurrected

City repeating mistakes on affordable housing

Density bonuses provide unintended consequences.

By Elizabeth Murphy,  The Vancouver Sun  August 5, 2017

“Size matters for a number of reasons, not only because the buildings will not provide a proper fit for the neighbourhood. The increased height and density inflates the land values around the site as it sets precedents that increase development pressures on older, more affordable surrounding housing stock.”

 

The City of Vancouver continues its relentless crisis capitalism to address the ongoing housing affordability problems that are, in part, its own creation.

The recent city proposals are to use a density bonus scheme to create more “affordable” rental housing supply. This looks remarkably like a repackaging of the failed Short Term Incentives for Rentals (STIR) program cancelled in 2012 and the subsequent Rental 100 program, but now with more density bonuses.

At least the city is now acknowledging that supply alone is not the answer. 2016 was a record year for new unit starts, about double the 10-year average. Yet affordability continues to worsen as most of the supply is expensive and disconnected from local incomes. The city’s proposals attempt to address this, but through potentially problematic means.

At a news conference on July 23, the city outlined the incentive options for developers, including extra density, parking relaxations and development cost levy (DCL) waivers. The Oakridge Municipal Town Centre pilot program will include a variety of housing around the Oakridge Centre mall. Midand highrise housing in the area would have to be either 100 per cent rental, with 20 per cent of those units meeting below-market affordability targets, or a blend of 30 per cent social housing units and 70 per cent strata or condo units. Following the Oakridge Town Centre pilot, the options would be considered for expansion across the city.

The affordability targets are based on no more than 30 per cent of household income spent on housing for incomes of $30,000 to $80,000 per year. This is essentially the same affordability targets the city used under their controversial 2009 rental program STIR.

Former director of planning Brent Toderian outlined three main problems with STIR: It did not create much rental; huge height and density increases were necessary to secure very few rental units or amenity contributions; and STIR unit rents were high.

The city found that mixed condo/rental STIR projects were the most problematic since they were generally larger in scale and inflated land values, but any community amenity charges (CACs) earned went back into the project to cover the rental. The subsidies were an average of $70,000 per unit, whereas the 100 per cent rental STIR projects were only $5,000 per unit. Loss of CACs for rental subsidies will need to be covered by the capital plan.

STIR was replaced in 2012 with the Rental 100 program. All projects are now 100 per cent rental, again aimed at the same income levels of about $30,000 to $80,000. It also limits where the projects can be located (on arterials and close to shopping areas) and to a maximum six storeys so they are wood frame with lower construction costs.

However, these units are mostly small in size, still have high rents, and have not provided affordability. The program also targets many locations that have existing older, more affordable rentals, and the demolitions result in a net loss of affordability. The projects are generally out of scale with the surrounding area.

The new program would require more height and density bonuses to achieve the secured lower rents. This will reintroduce many of the problems the original STIR program was cancelled for, especially for mixed social housing/condo projects. Continue reading

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NDP government

BC Election priority: ending big money in politics

By Elizabeth Murphy, Vancouver Sun, Monday, July 10, 2017

B.C. citizens voted in May’s provincial election to end big money in politics at the provincial and municipal levels. This was the primary election platform that both the B.C. NDP and Greens campaigned and agreed on as a priority.

The B.C. Liberals, backed by many development industry donors, raised $13.1 million. Realtor Bob Rennie was their head fundraiser. However, the NDP, with unions as their largest donors, only raised $6.2 million, less than half of what the Liberals’ raised.

Even with substantially lower funding, the NDP with the help of the Greens are now forming the government. This shows party endorsement by the development industry has become a handicap with the public.

The strong results for the NDP in Vancouver shows that citizens are fed up with the systemic corruption caused by the big money in politics that has resulted in the development industry having excessive influence on housing and transportation policy.

Although the development industry should be at the table for input into public policy, they have instead owned the table, often getting much bigger influence on housing and transportation policy than is appropriate by helping to fund the municipal and provincial parties of their choice.

The regional mayors and their plans are products of the big money that supports them and is largely responsible for the affordability crisis the region now faces. Demovictions, demolition of more affordable older housing stock, large spot rezonings that drive land inflation, and compromised planning processes have become the norm.

For example, Liberal MLA and former Vancouver mayor Sam Sullivan barely held his seat in Vancouver-False Creek — winning by only about 560 votes against an unknown NDP transgender candidate — in a riding that is usually a safe Liberal seat. But this riding had major controversies that involved both the province and the city of Vancouver.

This was raised as a concern by the then NDP MLA opposition critic for housing, David Eby. The New Yaletown community saw the results of development industry influence and many who otherwise would not vote NDP did so in protest of current practices.

Aspects of the Vancouver regional mayors’ plan are also problematic. The development industry supports this plan since it includes major projects such as the Broadway subway that would subsidize major tower development throughout the corridor. But communities along the corridor generally oppose this plan and would prefer more affordable transit options that serve more people across the transit network and would support more moderate human scale development consistent with neighbourhood plans.

Communities want to have meaningful input into how their neighbourhoods are planned. However, governments have become deaf to democracy and instead support policy that reflect donors’ interests.

The NDP and Greens committed to banning corporate, union and foreign donations with limits on individuals at both the provincial and municipal levels. These changes should be one of the first actions of the new B.C. government and should also apply to the anticipated Vancouver byelection, likely in October.

However, the recent appointment of Geoff Meggs to chief of staff by Premier-designate John Horgan sends a confusing mixed signal from the NDP.

This choice seems inconsistent with the objective to change the image of B.C. from the “wild west” of campaign financing as described in the media such as the New York Times, Globe & Mail and The Vancouver Sun. It is not so much an issue of Meggs’ 1990s baggage under the Glen Clark NDP government as director of communications, but what is most troubling is his more recent history at the city of Vancouver.

Meggs was central to the split within COPE forming the development industry backed Vision Vancouver that continues to accept large corporate donations from developers with enormous influence on housing policy. This has been described by academics and others as a form of systemic corruption.

With Meggs now proposed to have a key role in the premier’s office, can a leopard change its spots? Or will he be working to implement the city’s developers’ agenda rather than the commitments made by the NDP during the election? That may be the public perception.

The Vision Vancouver dominated city council has requested the province to amend the city’s charter to allow it to make its own campaign funding rules. But these are empty requests that are equivalent to the fox guarding the hen house when the two main political parties are dependent on development industry donations. Are they going to cut off the hand that feeds them?

Having someone who is so closely associated with this dynamic put into a prominent position in the premier’s office raises a concern, either real or perceived, about the integrity of the NDP’s election commitment to end big money in politics. There may be a role for Meggs at the provincial level, but is this the right one?

Those who voted for change will be watching closely to see if that change is meaningful and if it is implemented in a timely manner. It may be the deciding factor if this slim minority government lasts the term and will greatly influence the results of the next provincial election. Continue reading

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Chinatown: 105 Keefer St. Public Hearing

Historic Chinatown becoming Yaletown North?

By Elizabeth Murphy, Vancouver Sun, Saturday May 20, 2017

A rendering from the City of Vancouver report for the public hearing to rezone 105 Keefer Street. Handout / PNG

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The controversial Chinatown condo tower rezoning at 105 Keefer St., beside the Dr. Sun Yat-sen Garden, is going to a public hearing on May 23. It continues to be strongly opposed since 2014.

The Chinatown Historic Area Planning Committee (CHAPC), a city council-appointed group, voted against the proposal again in January, stating that their previous concerns had not been addressed. These concerns included excessive height and density, livability of units, quality and types of community amenity spaces in the building, and a richer mix of uses required.

CHAPC noted that “the proposal does not fully recognize the sensitivity of the site in relation to the Heritage Area, Memorial Square, Dr. Sun Yat-sen Garden, and the nearby museum.”

The proposal is 12 storeys with commercial space, 106 condo units and 25 social housing units. It has 75 per cent non-support in city consultation, yet the city continues to push through essentially the same design.

Helen Lee, an urban planner and chair of CHAPC, confirms that the current report still doesn’t address the group’s concerns. Lee says “each revised version provides only minor tweaks mainly focused on the architectural design elements rather than the more important issues of bulk and height. The proposal is too much for this very important site in the heart of Chinatown.”

These huge increases in height and density are proposed in exchange for only 25 units of so-called “social housing” that are in fact mostly market rentals that B.C. Housing will buy from the developer for $7.3 million. Hardly a public benefit, yet it also means waiving of development cost levies. The developer, Beedie Group, are large donors to the B.C. Liberals.

The late architect Joe Wai fought  to save Chinatown from the freeway and urban renewal in 1971. He went on to design many Chinatown landmarks, including the garden and museum.

“As it is now clear that we don’t want what is being built, the 105 Keefer Street rezoning becomes the ‘line in the sand’ if we, Vancouver (not just little Chinatown), would like some form of character as a city, besides the God-given mountains and inlets,” Wai said.

Former premier Mike Harcourt said Vancouver’s historic Chinatown is “teetering on the brink” and this one huge bulky building is causing particular alarm since the high-end condominium proposal would tower over the area.

“Development should re-energize and revitalize Chinatown, but not overwhelm it. This building dwarfs all of the heritage buildings of the Chinese community along Pender Street and it’s just too much,” Harcourt said.

Chinatown was given a National Historic Site of Canada designation in 2011. It is one of the largest Chinatowns in North America. However, the designated area only covers a portion of Chinatown on Pender Street from the Millennium Gate to Gore Ave. while providing no actual protection. The city’s land use policies determine what is built.

A number of city planning initiatives undermine Chinatown’s heritage character: from EcoDensity in 2007, the Heritage Area Height Review in 2008-09, the Downtown Eastside Local Area Plan of 2011-14, and changes to the transfer of density policy that now allows bonus density to be landed into Chinatown.

Vancouver’s Chinatown is now on Canada’s top-10 endangered list.

Most of Chinatown has now been opened up to large-scale tower development that is not sympathetic to the traditional architecture of two to four storeys and maximum height of 50 feet. It now allows tower heights of up to 150 feet, with two recent rezonings on Main Street even higher at 16 to 18 storeys.

Wai stated: “It all comes down to the demolition of a Historic District … erosion of local small retails such as those long-standing barbecue meat shops and barber shops. … If the height is double or more than the traditional 50 feet high, the density and bulk will transform the character and Chinatown will become unrecognizable. The freeway debates (1966-74) have de facto re-surfaced.”

The area zoning is being reviewed, but it will come too late for current proposals underway like 105 Keefer Street. The city has not used common practise to have an interim rezoning policy that restricts rezoning until the new zoning changes are in place.

The recent plaque-unveiling ceremony for Chinatown’s historic designation was followed by a banquet for 460 people to celebrate the event, including the Mayor, councillors, civic officials, and both federal and provincial representatives.

Fred Mah, the organizing committee chair, presented at the banquet that 105 Keefer is too tall, too big and not the right fit for Chinatown’s character. He urged everyone to come out to speak at the public hearing on May 23.

Mah expressed frustration that the lead city planners involved don’t seem to understand heritage zoning or care about Chinatown.

Heritage or character zoning requires a fine-tuned balance that makes the retention of existing character buildings of greater economic benefit than for demolition. New development should fit within the historic context. It requires specialized planning staff who appreciate heritage zoning.

This has been evident in other areas across the city as well. For example, in the heritage area of Grandview the city is now drafting zoning bylaws for the duplex RT zones. Current drafts demonstrate a complete disregard for the economics of character retention and instead add more advantages to demolition with no character design guidelines.

It is the same lead planner, Paul Cheng, for Chinatown and Grandview. Although he is running into problems in these two heritage area rezonings, he did well in the Norquay plan because it was not a character historic area. After a revolving door of planning teams in Norquay, Cheng was a good fit there and got things done. But these heritage areas are different and Cheng keeps bringing back proposals that don’t work.

Further complicating this is that staff have indicated that the Grandview duplex RT zone may be used in the RS zones across the city as part of the character home rezoning review.

So a lead planner, who doesn’t support heritage, is in charge of drafting zoning bylaws for heritage areas such as Chinatown, Grandview and character housing zones. No wonder this is not working. Is the city’s real agenda to eliminate heritage districts entirely?

Continue reading

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Housing reset

Supply myth exposed, but more of the same

By Elizabeth Murphy, Vancouver Sun, April 15, 2017

Vancouver keeps building housing units that few Vancouverites can afford. JONATHAN HAYWARD / THE CANADIAN PRESS

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The City of Vancouver is finally admitting that they cannot build their way out of the housing affordability crisis. The supply myth has been driving ever-escalating amounts of market housing, but affordability is getting worse, not better. The city now says that “we have plenty of supply — what we need is the right supply.”

This is the conclusion of a recent report to council that proposes a housing reset. Although they correctly identify that a change of direction is needed, the city instead proposes more of the same.

The city has been approving market development at a record pace, yet prices continue to escalate. The new supply is not bringing affordability and never will if we continue doing the status quo.

In fact rezoning has been inflating land values while demolishing the older more affordable housing stock. People are being displaced and priced out of their city. This is what happens when the real estate market is disconnected from the local economy.

Many of the needed solutions are out of the city’s jurisdiction. However, the city’s own land-use policies of promoting unsustainable levels of market redevelopment has been largely responsible for enabling this crisis to escalate.

The problem is that they don’t seem to know what the right supply is, other than it needs to be affordable. And they do not know how to achieve that affordability. So it still falls back to the same old doctrine.

By engaging with limited interest groups and insiders, the city has set emerging directions before broader public input. This is putting the cart before the horse. The focus of the emerging directions is of course reflecting that feedback, which is — the same old response — more supply. But none of the income levels identified as needing housing options will likely be able to afford the proposed new housing options. Continue reading

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BC Provincial Election

How big money corrupts politics

BC’s Wild West of campaign funding needs reform  

By Elizabeth Murphy

Common Ground Magazine  April 2017

Of the corporate donations to the BC Liberals, the largest group among the top donors are property developers.

The provincial government has jurisdiction over election rules for both the province and municipalities. Here in BC, the wild west of campaign fundraising, provincial and municipal campaign finance rules are currently among the least accountable in Canada. This has been a huge problem for decades and will not change until the province takes action. The British Columbia provincial election on May 9 brings an opportunity to raise the issue of big money in politics and campaign finance reform.

Large donations and cash for access to candidates (often from vested interests) are standard practice with multi-million dollar campaigns. We are becoming the equivalent of a banana republic as globalized capital increasingly influences our governance.

Having the regulators funded by those they regulate is a form of systemic corruption. Limits on individual donations and banning corporate, union and foreign contributions are standard practices in many provinces and at the federal level. But not in BC. Here, at both the provincial and municipal levels, few restrictions exist and existing rules are often ignored.

The Vancouver Sun reported that, from 2005 to the first few weeks of 2017, of the corporate donations to the BC Liberals, the largest group among the top donors are property developers, with 21 of the top 50. Condo marketer Bob Rennie was the BC Liberal’s head fundraiser up to January 2017, leaving the party well funded for the May 9th election. Rennie has also been a prominent supporter and fundraiser for Vancouver’s ruling party, Vision Vancouver and Mayor Gregor Robertson.

These developers include the Aquilini family at the #2 spot ($1.43 million); Adera Group ($1.1 million); Wesbild ($929,576); and Peter Wall and nephew Bruno Wall ($914,425), who own and manage Wall Financial Corp., including the Wall Centre in Vancouver where the BC Liberals held their 2013 election victory win. The top 50 list also includes Polygon, Concord Pacific, Beedie Development Group, Onni, the Redekops and Ilichs.

There are also 10 natural resource companies in the top 50. The coal and metals miner Teck is at the #1 spot ($2.82 million); energy company Encana ($1.18 million); miner Goldcorp ($1.08 million); forestry company West Fraser ($990,320); and also Imperial Metals of the Mt. Polley Quesnel Lake recent mining dam disaster.

The troubling part of all this is the perceived or real influence these donors may have on government policy. Cash for access to government officials or candidates are reported to be a common practice. Continue reading

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Character house zoning backpedaled

Saving character houses needs incentives and zoning

By Elizabeth Murphy, Business in Vancouver, March 17, 2017

The city is moving away from downzoning, especially on non-character lots. This is a good thing because much public pushback was generated when they went too far by not adequately balancing the economics. But now the city must be careful not to throw the baby out with the bathwater.

Incentives for retention do need a supportive conditional zoning framework for them to work, as is the case in Kitsilano. But the economics must be very carefully balanced so that it is fair to owners, allowing the retention option to provide property values that are roughly equal to – or in some cases greater than – those resulting from the non-character new construction option. This has been achieved in Kitsilano, and the city should learn from past successes.

Continue reading

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Character house zoning

Saving Vancouver character houses through incentives

By Elizabeth Murphy, Vancouver Sun, March 2, 2017

The City of Vancouver is reviewing incentives to retaining character houses, such as allowing additional suites. Elizabeth Murphy / PNG

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The City of Vancouver is doing a character house zoning review to consider saving character houses through incentives such as increased size, number of units, and infill. This retains character while accommodating growth in a more sustainable way.

Although this is good in principle, additional options need to be considered.

There is an urgent need for the review. Since city zoning rules were changed in 2009, demolitions increased to over 1,000 a year with replacement construction of much larger and more expensive “monster” houses. On average, home demolitions have increased 80 per cent between 2009 and 2015, and by 73 per cent on average for pre-1940 homes.

Most of these demolished homes were livable and structurally sound, many substantially upgraded, many with secondary suites. Prime old growth wood was sent to the chipper, materials sent to the dump and little, if any, materials reused. Many of the new houses, often twice as expensive as the older ones they replaced, are left vacant purely as investments. Hardly a green or sustainable city.

City of Vancouver survey results show that 90 per cent of citizens think the retention of character buildings should be encouraged. 

Some in the development lobby say retention of character houses through incentives is freezing single family zoning. In fact, it is doing just the opposite. Character zoning is proposed to conditionally allow a variety of additional options to meet current needs through adaptive reuse. This is by far the most sustainable way to accommodate growth, increase rental and ownership options, provide more affordability and mortgage helpers, and retain neighbourhood character.

This is not an issue of needing more zoned capacity to meet growth. The city’s consultants and new head planner, Gil Kelly, have confirmed the city has enough already zoned capacity to meet regional growth to 2041 and beyond. We just need to find the right balance for more affordable sustainable housing choices while retaining neighbourhood character.

This can be achieved with a few adjustments to the character options proposed in the review.  Although there may be some opportunities for new housing types such as duplexes, row houses, townhouses and low-rise apartments, this can be done through detailed neighbourhood-based planning at a later date.

However, if we don’t deal with the character house issue now, the opportunity to expand housing types through adaptive reuse of character buildings will be lost forever.

Much attention is rightly being made to the plight of millennials and their needs for affordable housing. However, there should be no delusions that new construction of duplexes, townhouses and row houses will fill this gap. Even east side half-duplexes go for more than $1 million, not much less than an older east side character house.

More than likely you will today find millennials in secondary suites and shared multi-suite character house rentals, which are quickly disappearing.

So how do we retain character houses while being fair to all? To find the answer we just have to look at examples in existing successful character retention zones and adapt what we have learned there.

Vancouver used to be a leader in sustainable city building. In the 1970s, inspired by the teachings of urbanist Jane Jacobs, Vancouver was one of the few to reject freeways and urban renewal projects into the downtown core like that proposed for Strathcona, Chinatown and Gastown in the 1960s. Inner-city neighbourhoods such as Strathcona, Mount Pleasant and Kitsilano created new RT zoning that was conditional on the retention of character houses, providing incentives for adaptive reuse and creative infill.

These RT zones have shown that when economics are balanced between the retention and new build options, land values are stabilized to be roughly equal whether they are character or not. In some instances, the character house is often worth more since the incentives are better than what could be built outright.

For example, in Kitsilano there are both RS5 (non-character) and RT7/RT8 (character retention) zoning. Based on 2017 B.C. assessments, the land values of typical 33 ft. x 120 ft. lots are roughly equal among the zones when comparing similar average locations. This shows that the conditional incentives have properly balanced the values of the various options in the RT7/RT8 zones.

The city needs to consider how best to balance the economics for the areas now under review to result in equivalent land values for both the retention option and the new-build option. This is achievable.

The main incentive is floor space ratio (FSR). Retention needs to have more than new construction options overall, especially in the main house, while new build options have to be at least big enough to be viable. Currently only allowing 0.5 FSR for new (reduced from 0.7 FSR) doesn’t allow enough, especially on smaller lots such as on 33 ft. frontages. On non-character lots, the FSR could be earned back through meeting design guidelines and ensuring it is suite ready, for example.

However, if maximum allowable FSR for new construction is increased, then perhaps more needs to be done for the retention option other than just 0.75 FSR such as exempting part or all of the basement FSR as a further bonus since older character houses have subprime lower floors.

Design guidelines for both new and retention options should be approximately the same and require about equal processing times. Indeed, preferably, the renovation option should take less processing time by fast tracking approval as an incentive for retaining character homes.

There is a push from mainly modernist architects and other development interests to abolish design guidelines. But we have seen the results of removing design guidelines and they are not increasing good quality creativity. Since design guidelines have been reduced in RS5 zones in 2009, effectively eliminating them altogether, there has been an overall increase in expensive “monster” houses that maximize the square footage, allowed without any design context. The lack of design guidelines allowed the pink stucco boxes of the 1980s and the newer faux-rock and tiled versions of today.

Retaining character streetscapes and buildings using authentic materials are important elements. But there are some opportunities for more modernist forms where streetscapes have already been substantially altered by non-character forms.

One of the biggest impediments to more sustainable adaptive reuse of character buildings are the building and development bylaws and how they are administered. Changes to the building code need to allow for more of the original house to be retained for multi-family conversion dwellings and major renovations. Alternative equivalencies should be established for renovations of older character houses and a separate dedicated approval stream with specialized dedicated staff should be set up to fast-track renovations. 

Right now it can take as much as 20 months to get building permits for even a small interior renovation. The current system is entirely dysfunctional.

There are many existing unauthorized suites in character houses that were converted years ago, that the city will order removed once made aware of them. Many of these are in RT and RM zones as multi-suite conversions from the 1940s when the War Measures Act overruled municipal housing bylaws to encourage the creation of additional suites to relieve housing shortages.

Councillor Adriane Carr is bringing a motion to council to grandfather these suites and administer them under the secondary suite program rather than the current practice of shutting them down. That’s a step in the right direction.

There are many things that need to be done to provide incentives for retaining character housing stock through adaptive reuse. This is the most sustainable way to add more housing options and we only have a small window of time to do this before we lose this opportunity forever. Continue reading

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Heritage and character houses

City hall must act quickly to save Vancouver heritage homes

By Elizabeth Murphy, Vancouver Sun, December 2, 2016

Home at 4255 West 12th in Vancouver is yet another heritage home in the city that will soon be torn down. 

The City of Vancouver is finally considering options to create incentives for character house retention. After years of character and heritage houses being rampantly demolished and replaced by ugly new monster houses, it is way overdue for changes to address this issue. Continue reading

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Business in Vancouver – Transit Funding

Victoria’s civic tax grab a threat to local land-use authority

By Elizabeth Murphy, Business in Vancouver, November 1, 2016

The province is about to impinge on the civic tax base, land-use authority and democracy by using development fees to fund transit and by making increased density zoning a requirement of transit funding. The City of Vancouver and regional mayors are also complicit, in desperation to get their pet megaprojects approved. Continue reading

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Transit and Development

Density not the answer to transit funding

By Elizabeth Murphy, Vancouver Sun, October 11, 2016

The B.C. Liberals seem to think that using development to fund transit and making increased density a requirement of transit funding are vote-getters, writes Elizabeth Murphy. Gerry Kahrmann / PNG

Province’s planned cash grab based on false premise,

The housing supply issue is a Trojan Horse being used to deliver a scheme that would make city land use authority irrelevant, while stripping cities of their tax base.

DARLENE MAR Z AR I, former city councillor and B.C. Minister of Municipal Affairs

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The province of B.C. is poised to fund transit by undermining the civic tax base, civic land use authority, and civic democracy. The province is looking at using development fees to fund transit and at making increased density zoning a requirement of transit funding. It is a ploy that has been underway for decades as the province creeps into city jurisdiction.

Although municipalities only get seven per cent of the tax base, while provincial and federal levels of government get 93 per cent, the province still wants more.

The municipal tax base is mainly dependent on property taxes. They also use development fees such as Development Cost Levies and Community Amenity Charges toward amenities to service growth such as infrastructure, parks, community centres, libraries, daycare, etc. The province is contemplating a tax grab of both property taxes and development fees to pay for provincial responsibilities such as transit

To make the move on development more profitable for the province, they are looking at making transit funding dependent on increased density rezoning throughout neighbourhoods where transit stations land. This is what TransLink refers to as the “Hong Kong model”.

This has been underway for over a decade as the Regional Growth Strategy replaced the Liveable Region Strategic Plan in 2011. Effectively, the new plan has made it easier to sprawl into the green zones at the same time encourage high-density, transit-oriented development into what are designated frequent transit development areas. So, building up and out.

The current housing affordability crisis is being blamed on a lack of housing supply, even though the facts do no support this myth. Conveniently, this is being used to justify more market housing supply, which will not likely be affordable.

In the City of Vancouver, there is already ample zoned capacity. The city consultant’s report of June 2014 confirmed that, “the City has sufficient capacity in existing zoning and approved community plans to accommodate over 20 years of supply at the recent pace of residential development.”

This study only considered multi-family capacity. The report also notes that the city anticipates additional capacity beyond the year 2041 in these zones. Plus the city has done more rezoning since the report was written in 2014, to create even more supply.

The new head planner for the City of Vancouver, Gil Kelly, recently spoke at a public meeting and confirmed that the city has enough existing zoned capacity to meet regional growth to 2041.

The city is also approving a record number of new development permits. According to a recent city information bulletin, they are building way more than outlined in the Regional Growth Strategy and are leading the region on permit approvals. The city says, “this data demonstrates that new housing supply is at record levels and exemplifies the fact that we are approving significant new housing stock”.

Clearly, we do not have to create more zoning supply in Vancouver to meet regional growth. Although there may be other reasons to adjust zoning, there is no rush, and the city can achieve this through local area planning without provincial interference.

Darlene Marzari was on city council in the 1970s and was the provincial Minister of Municipal Affairs from 1993 to 1996. She established the Liveable Region Strategic Plan during her mandate. When asked to comment on this potential provincial move on transit funding, she said that “this would be a travesty. It would clearly be a cash grab of the civic tax base. I am livid about any potential incursion of provincial authority into civic jurisdiction.”

Further, Marzari explained, “the housing supply issue is a Trojan Horse being used to deliver a scheme that would make city land use authority irrelevant, while stripping cities of their tax base. This undermines the civic public hearing process and therefore effectively amounts to selling zoning. It amounts to the slow death of civic democracy.”

So let’s look at this Trojan Horse of housing supply. Clearly, there are better ways of managing supply.

Larry Beasley was the former co-director of planning for the City of Vancouver. Although he acknowledges the relationship between supply and demand in affordability, he has written about the importance of what kind of supply is created.

In a Sun opinion column about a year ago, Beasley laid out how the areas outside of the downtown core can be sustainable communities, including for transit-oriented development, without the need for downtown-scale development.

He wrote that “a density of no more than 40 units-per-acre starts to work for most of the issues of sustainability and viable urban functionality and financing.” The inner neighbourhoods of Vancouver that were designed pre-war generally meet or exceed this density, even though they are mostly below four storeys. For example, Kitsilano, Mount Pleasant, Grandview and Strathcona were all 40 to 60 units per acre prior to recent upzonings.

So a lot of increased density can be added while still staying within scales that blend into established communities. However, if the province requires upzoning to make it viable to fund transit through development charges, it will ensure that the scale of development will be very dense towers and override community based planning.

Ironically, the B.C. Liberals seem to think that using development to fund transit and making increased density a requirement of transit funding are vote-getters. The Coalition of Vancouver Neighbourhoods, representing about 3o neighbourhood groups, recently sent a letter to Premier Christy Clark telling her otherwise. The province may want to reconsider their policy direction and listen to the people who would be affected rather than self-interested advisors. Continue reading

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Housing principles

Affordable housing needs systemic changes

By Elizabeth Murphy, Vancouver Sun, Saturday August 27, 2016

Increasing housing supply is often promoted by government, and vested interests, as the solution to the affordable housing crisis. In fact, the current record-breaking level of rezoning and development in the City of Vancouver contributes to property inflation that is making the city less affordable. We need other approaches.

The city’s consultant’s report confirmed that the city has sufficient capacity in existing zoning and approved community plans to accommodate supply to beyond 2041 at the recent pace of residential development. This was without including the new capacity created in the just-approved Grandview Woodland Community Plan.

The city recently confirmed they are building way more than required in the Regional Growth Strategy and are leading the region on permit approvals. The city says, “this data demonstrates that new housing supply is at record levels and exemplifies the fact that we are approving significant new housing stock”.

However, when real estate is disconnected from the local economy due to global capital flows, simple supply and demand economics no longer work. Increasing zoning has proven to create speculation that drives land inflation. This adds to the cost of housing.

So from this we can see there is no rush to force yet more zoning supply that does more harm than good. Solutions to affordability are complex and multifaceted.

Although broader public policies regarding the social safety net, immigration and taxation play important roles in housing affordability, land-use policies are the focus in this article.

There are several planning principles that need to be followed to create a system that supports an affordable built environment.

  1. Do no harm. Protect vulnerable people, cultural and heritage buildings, community amenities and the environment.
  2. Upgrade, improve and adaptively reuse good-quality existing buildings.
  3. Plan very carefully for future new development and implement incrementally to avoid land inflation.

Although not fully followed, these principles generally were reflected in the city’s planning process from the 1970s to 1990s.

The proposed freeway through downtown was stopped in the 1970s. Then “Local Area Plans” were created in the inner-city neighbourhoods of the West End, Strathcona, Mount Pleasant, Grandview, Kitsilano and Marpole. These were comprehensive participatory plans that included a planning office in each neighbourhood and a strong social planning role. They resulted in plans that were community supported, with detailed design guidelines, and they lasted intact until 2006 when EcoDensity changed this direction.

Rather than embracing these area plans as models for future growth, the city embarked on a new direction of making increasing density as the primary objective. It has resulted in renter displacement and homelessness at record levels. Many people are being economically forced out of the city altogether.

The signal to industry that everything is at play, has resulted in older rental apartment buildings being bought for their redevelopment potential rather than rental income values. These apartments were mostly built before the Strata Act. Now that strata projects are so much more profitable, the older rental building stock is limited and important to retain.

Yet this older affordable legacy is being dismantled by increasing zoning where these apartment buildings are mostly located. Since 2010, these recent community plans in the West End, Downtown Eastside (Strathcona, Hastings, Chinatown), Marpole, Mount Pleasant, and now Grandview, have led to land speculation, assembly, and the resulting inflation.

Although rate-of-change policies are intended to protect rentals, most replacement units tend to be smaller and more expensive. Affordable rentals lost. People displaced.

Similarly, transit planning signals massive upzoning along new transit lines. Dogmatic application of transit oriented tower development undermines local planning processes without reasonable consideration of community scale and character. Broadway west to Arbutus is reported as being in the midst of a “land rush” in speculation of a subway that has yet to be finally approved and is potentially decades from completion if funded. This is driving land values ever higher.

So the key to housing affordability is to slow down the industry’s expectations that everything is up for rezoning and development. Spot rezoning has become the new normal. This has to change.

Then perhaps staff will have more time to process the backlog of permits that currently is taking so long to get through an overburdened city hall. It should not take many months, sometimes over a year, to get a simple interior renovation approved like many applicants are currently experiencing.

It also increases cynicism in the electoral process when people can see that the big money going into political parties is coming from the same people who get large rezoning approvals.

Worse yet is that at the civic level there is no requirement even for reporting donations between election years. So with a four-year term, three years of donations go unreported unless reported voluntarily.

Although provincial parties must report donations on an ongoing basis, there are no donation limits on amounts or bans on corporate or union donations. Civic campaign finance legislation is under the control of the province that is reluctant to make changes that would require provincial campaign finance changes as well.

So campaign finance reform, at both the civic and provincial levels, is essential to creating checks and balances that help to moderate housing prices by reducing the enormous political influence of vested interests on land use policy.

In summary, there are a number of principles with checks and balances that need to be implemented to create a system that supports more stable affordable urban living. These systemic changes, as well as other land use options that will be discussed another day, are essential if Vancouver is to have a future as more than just a resort city for the rich. Continue reading

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Housing supply clarified

Affordable housing myths and facts

By Elizabeth Murphy, Vancouver Sun, August 19, 2016

The city’s consultant’s report of June 2014 confirmed, “the City has sufficient capacity in existing zoning and approved community plans to accommodate over 20 years of supply at the recent pace of residential development.” Photo Stephen Bohus BLA / PNG

 

The province is expected to make pre-election announcements starting in September featuring housing affordability fixes. Unfortunately, it looks like the policies they are considering may be ineffective yet problematic. To find the right solutions, they need to be using accurate assumptions rather than myth.

The B.C. Liberals frequently suggest increasing housing supply as the solution to the housing affordability crisis. In the City of Vancouver, there is already ample zoned capacity. The city’s consultant’s report of June 2014 confirmed, “the City has sufficient capacity in existing zoning and approved community plans to accommodate over 20 years of supply at the recent pace of residential development.”

This study only considered multi-family capacity, not any of the other zoned capacity across the city. The report also notes that the city anticipates additional capacity beyond the year 2041 in these zones. Plus, the city has done more rezoning since the report was written in 2014, to create even more supply.

The city is also approving a record number of new development permits. According to a recent city information bulletin, they are building way more than outlined in the Regional Growth Strategy and are leading the region on permit approvals. The city says, “this data demonstrates that new housing supply is at record levels and exemplifies the fact that we are approving significant new housing stock”.

Clearly, we do not have to create more zoning supply in Vancouver to meet regional growth. There may be other reasons to adjust zoning, but there is no rush. It must be done very carefully since upzoning causes speculation that drives land inflation. This has the unintended consequence of making housing even less affordable.

Increasing zoning supply generally won’t reduce prices for the end product either. In order to get bank financing, developers pre-sell their units and will only go ahead with the project if they can get their price.

Simplistic supply and demand economics to create affordability may work in a closed economy, but not with the global capital currently flowing into the Lower Mainland, and the City of Vancouver in particular. As long as real estate is disconnected from the local economy, it doesn’t matter how much new stock we build, it will be beyond what most local residents can afford.

The 15 per cent property transfer tax surcharge for foreign buyers may not be the windfall of revenue expected. There are many ways to get around this tax. Foreign capital can be exempt from the tax if it goes through a local purchaser or corporation. The tax may also be successfully appealed through trade agreements such as NAFTA. Other regulatory measures will be required to deal with foreign investment and its impact on affordability.

Provincial investment in infrastructure, such as transit, is dearly needed, however, the province must not further download onto cities to achieve this by appropriating from the limited civic tax base of property taxes and development fees.

The costs of growth are enormous and mostly paid at the civic level. Development fees such as Development Cost Levies (DCLs) or Community Amenity Contributions (CACs) only cover about 10% of the costs, with general revenue (mainly property taxes) covering the majority of capital and operating growth costs.

If the province expects these fees to go towards funding transit instead of civic infrastructure, there will be more density bonuses required to pay for transit and less civic revenue for the needed amenities for the increased population.

Even as it is, the city is becoming amenity deficient for the amount of growth we have taken on to date. There is a structural loss of green space and recreational facilities. Building housing on School Board and Park Board land, such as proposed for the Britannia Centre in the recently approved Grandview Woodland Community Plan, is adding many more people with less amenities. The school and park systems need to be protected, funded and expanded, not used for yet more housing.

Tying provincial transportation funding to transit oriented development is not a vote-getter. It tends to be implemented in a dogmatic way that forces tower forms that are disconnected from the surrounding community context.

Vancouver was built prior to the common use of the automobile. It was designed around the streetcar system that has all areas of the city within a 10 minute walk of an arterial, making the city inherently transit oriented. All we need is more frequent reliable electric transit to support mode shift. In the city we need transit to serve the existing population rather than having transit form new land use patterns like in the developing suburbs.

Using transit to dictate massive changes in land use in an establish transit oriented city like Vancouver, is letting the tail wag the dog. Land use should be based on local community planning with transit oriented development in scale with the neighbourhood context.

For example, the Canada Line along Cambie Street was already at peak hour capacity upon completion. That was entirely due to mode shift without any upzoning. Although some of the rezoning since then may be justified, there is no justification for the major tower developments at Oakridge and Marine Drive that put the transit way over capacity. And phase three of the rezoning process for the Cambie Corridor is still yet to come.

The dogmatic application of transit oriented development is not considering the capacity of the system or the surrounding neighbourhood impact.

So increasing housing supply and tying it to transit funding are not the solutions to affordability. But there are real solutions, although complex. These will be for a future discussion. Continue reading

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Grandview Woodland Community Plan

Affordability jeopardized in new Grandview plan

By Elizabeth Murphy, Vancouver Sun, August 8, 2016

Elizabeth Murphy believes the newly passed Grandview-Woodland Community Plan jeopardizes affordability by putting existing affordable rentals, heritage and character at risk in spite of community opposition. Photo courtesy Stephen Bohus, BLA.

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Vancouver just approved a new Grandview-Woodland Community Plan, in the neighbourhood known as the Commercial Drive area. The plan jeopardizes affordability by putting existing affordable rentals, heritage and character at risk in spite of community opposition.

There are references in the plan to retaining existing rentals and protecting heritage, but the adopted policies do just the opposite. Incentives for redevelopment increase land speculation, leading to land, unit and rent inflation with loss of community character.

At the start of the planning process, the planners opened their presentations stating that Grandview needed to increase density to meet projected growth under the Regional Growth Strategy (RGS) since 160,000 people were coming to Vancouver.

This was later found not to be the case when the RGS was changed to reflect the 2011 census for a 148,000 population increase from 2011 to 2041. Further, the city’s consultant report from June 2014 confirmed, “The city has sufficient capacity in existing zoning and approved community plans to accommodate over 20 years of supply at the recent pace of residential development.” This is without including the Grandview Plan.

The consultants used only part of the existing zoned multi-family capacity that was most likely to be developed. It did not include other zones such as duplex or single family that allows multiple suites and infill, or any further rezoning that was done since 2014, two years ago.

This shows that there is no rush to create more city-wide zoning supply.

Most of the Grandview neighbourhood was built out in 1910. From the 1940s after the war to the 1970s, many houses were converted into multiple-suites, rooming houses, rental apartments, co-ops and social housing, most of which still remain. This created more growth than most other areas of the city. The fact that the neighbourhood population has gone down by 6.5 per cent in the last few years is not a reason to upzone in a way that puts this existing affordable housing at risk.

Vancouver’s practice up to 2007 was to avoid policies that would add development pressure into inner-city neighbourhoods with Local Area Plans, approved from the 1970s to 1990 in Grandview, Mount Pleasant, Strathcona, Kitsilano, Marpole and the West End. All are relatively dense and have the majority of the city’s affordable purpose-built rental housing as well as a large amount of the heritage character.

Sam Sullivan’s EcoDensity in 2007 promoted increased density everywhere. After Sullivan and his NPA council were removed from office in 2008, Gregor Robertson’s Vision council rebranded EcoDensity under Greenest City. Then these older more affordable neighbourhoods were targeted for increased redevelopment which was an unwise shift of policy. Grandview is the most recent victim of this direction. Continue reading

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Business in Vancouver – Affordability

Rezoning is increasing land speculation, reducing affordability

By Elizabeth Murphy, Business in Vancouver, July 22, 2016

The rush to rezone fuels speculative land inflation that’s further exacerbated by unregulated foreign capital flows. The fact that the City of Vancouver already has ample zoned capacity for 20 to 30 years of growth needs to be considered before proceeding down this road.

Governments are reluctant to address the real causes of unaffordability, such as foreign capital flowing into real estate and selling citizenship through Quebec’s foreign investor program, whose investors land in Vancouver. These factors are disconnecting residential prices from the local economy.

Instead, the government points to simple supply-and-demand economics, even though that is no longer working. Industries that promote the status quo are primary contributors to campaign funding that elected political parties rely on. Increasing zoning to allow more housing supply will not make prices drop when the demand side is coming from outside of our local economy.  Continue reading

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Zoned Capacity – Grandview Plan

Housing affordability – Rush to Zone

By Elizabeth Murphy, Common Ground Magazine, July 15, 2016

Grandview-Woodland slated for rezoning under the draft community plan is being rushed through for approval by City of Vancouver council before the end of July 2016, only four weeks after public release. Every part of the neighbourhood will be affected.

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The Vancouver housing affordability crisis is being addressed by a rush to zone, on the false premise that unaffordability is being caused by a lack of zoning supply. This is like the former Bush administration’s rush to war with Iraq, based on false information about Iraq’s “weapons of mass destruction.” Vancouver’s rushed actions, based on false information, are causing enormous damage to our city.

Rampant rezoning to add zoned capacity is driving speculative land inflation, which is further exacerbated by unregulated foreign capital flows. The fact there already is ample zoned capacity to meet future growth must be considered before going further down this road.

Governments are reluctant to address the real causes of unaffordability, such as foreign capital flowing into real estate and selling citizenship through Quebec’s foreign investor program, whose investors land in Vancouver. These are disconnecting residential prices from the local economy. Instead, the government points to simple supply and demand economics, despite the fact that is no longer working. Those industries that promote this status quo are primary contributors to campaign funding that elected parties rely on. Increasing zoning to allow more housing supply will not make prices drop, especially not when the demand side is coming from outside of our local economy.

Increased zoning often inflates land values, making the housing crisis worse

Generally, land values are a big part of Vancouver’s crazy real estate that causes unaffordability in both existing and new development. By increasing zoning, it drives speculation on land values, which increases property prices, overall.

Regardless of whether or not a property is developed, the new development potential gets priced into the land. This is then part of any property sale price or becomes the expectation of an existing owner for a return on their investment. If they are not getting enough return, rental rates will be raised to make it worthwhile. Or they will demolish and build new.

New rental apartment development is often twice as expensive and a fraction of the size of existing affordable units. New houses are usually twice as expensive to buy and much larger in size.

Not to say there should never be any rezoning. But what currently exists should first be very carefully considered as well as what would be gained or lost if an area is rezoned. Since development pressure adds increased inflation, which means more expensive housing, rezoning is generally not in the public interest.

Existing rental buildings are often bought on speculation that the City will be removing its decades-long Rate of Change requirements of one-to-one replacement of rentals. If anything, in this climate, the Rate of Change policies should be expanded, not reduced. Governments often use the excuse that more zoning supply is necessary to meet anticipated growth. However, this is not the case in Vancouver.

Existing zoned capacity can already meet future population growth

Regional planners have estimated how much population growth there will be based on current and past trends. The updated Regional Growth Strategy (RGS) estimates the population of the City of Vancouver will increase by 148,000 from 2011 to 2041.

The city’s consultant report from June 2014 confirmed, “The City has sufficient capacity in existing zoning and approved community plans to accommodate over 20 years of supply at the recent pace of residential development.”

Emphasis is on the “over” 20 years. The estimate includes only a small portion of the zoned capacity, mostly concentrating on either recent multifamily zoning, or an estimated percentage that is likely to be built out. They are projecting the existing record pace of development will continue into the future. The report was intended to show that supply was not restricted by city policies. And it certainly has not been.

The report did not consider that all “single family” lots can have three units – or the capacity in RT duplex/infill zones. We also have to add the further substantial rezoning that has taken place since the report was completed in June 2014, two years ago. The full-zoned capacity is, therefore, much bigger than the amount included by the consultants.

So if there is already so much zoned capacity, why rezone more affordable neighbourhoods like Grandview-Woodland (the Drive)? This is a good question, especially when the Drive already has so many existing affordable rentals, co-ops, social housing units and multi-suited heritage houses. Continue reading

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Housing Supply

Affordability Crisis: More of the same not the solution

By Elizabeth Murphy, Vancouver Sun, July 8, 2016

City of Vancouver consultants reports confirmed there is sufficient capacity in existing zoning and approved community plans to accommodate over 20 years of supply at the recent record-setting pace of residential development.Photo courtesy Stephen Bohus, BLA.

 

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Vancouver’s housing affordability crisis is being driven by development speculation and the unchecked flow of foreign capital. But rather than deal with these real issues, the crisis is being falsely framed as a lack of housing supply. In fact, rezonings for increased density inflates land values, which is a big part of the problem.

Vancouver has an enormous amount of existing zoned capacity, but the amount of zoning already in place for increased development has yet to be built out.

The city’s 2014 consultant report confirmed there is sufficient capacity in existing zoning and approved community plans to accommodate over 20 years of supply at the recent record-setting pace of residential development. They only counted recently rezoned new multi-family supply, and even more has been added since 2014.

No lack of supply issues here.

Yet, even though there is so much capacity for new housing supply, prices have been escalating at record levels. Developers only build once they can get their price at presales required for financing that ensures escalating prices. Increased zoned capacity in new community plans has not brought in more affordability either.

For example, the West End Community Plan, approved in November 2013, allowed increased zoning in some areas up to 60 storeys. One of these sites was an assembly of two older, more-affordable low-rise rental apartment buildings, reportedly bought by Peter and Bruno Wall for $16.8 million in 2014. Recently sold to foreign investors for $60 million, they were flipped a month later for $68 million, all without paying property transfer taxes due to it being a bare trust.

This will result in luxury condos built to replace existing affordable rentals. The new community plan that allowed the 60-storey development instigated the land speculation and inflation. Increased density equals loss of affordability. These projects are often exclusively marketed overseas.

The recently released Grandview community draft plan similarly puts a large amount of older affordable rentals, co-ops, social housing and heritage buildings at risk. There is no justification for approving this plan.

All along the Cambie Corridor there have been significant increases in development potential. This has resulted in land speculation and assemblies for condo development. Mostly six to 10 storeys, with 32 storeys at Marine and 45 storeys at Oakridge. Even though the Canada Line was at peak hour capacity from the day it opened in 2010, new rezonings continue to be approved. Land and unit values continue to escalate despite increased supply while transportation and amenities are diminished and cannot keep up with increased needs. Continue reading

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Extravagant Transit Plan

Opinion: Metro Vancouver needs an affordable transportation plan

By Elizabeth Murphy, Vancouver Sun, June 26, 2016

Transit announcement 2016

 

Recent announcements on transit funding in B.C. with Vancouver Mayor Gregor Robertson, Premier Christy Clark and Prime Minister Justin Trudeau (left to right) seem to be premature, says commentator Elizabeth Murphy. JONATHAN HAYWARD / THE CANADIAN PRESS

 

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All levels of government are now coming to the table to fund transit. However, their current proposals are not adequate, sustainable, affordable or in the public interest.

We need a better plan.

The federal Liberal government is rolling out its infrastructure spending commitments, but recent announcements on transit funding in B.C. with Prime Minister Justin Trudeau, Premier Christy Clark and Vancouver Mayor Gregor Robertson seem premature.

The budgets, sources of funds and final plans have yet to be confirmed, and many proposals are problematic, including related development deals.

The proposed funding is being spun as a “down payment” on the Vancouver region’s $7.5-billion wish list. Phase 1 breaks down as $370 million federal, $246 million provincial and $125 million from unidentified regional public land sales. We are effectively selling the farm to buy a fancy car.

Current estimates are out of date, so final budgets will be significantly higher.

The most extravagant of the transit projects is the Broadway subway, from the Millennium Line at VCC-Clark Station along Broadway to Arbutus Street. This line will siphon off much of the transit budget that could be going to provide broader transit expansion options.

This has been raised by UBC Professor Patrick Condon, as shown in the accompanying maps, from his study comparing a subway with streetcars. For a fraction of the cost of a subway on Broadway, we could have streetcars and an expansion of electric trolley buses across the city and region. Continue reading

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