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.

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.

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.

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.

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.” 

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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”.

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.

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.

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.

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. 

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.

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.

 

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.

Extravagant Transit Plan

Opinion: Metro Vancouver needs an affordable transportation plan

By Elizabeth Murphy, Vancouver Sun, June 26, 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

 

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.

Transit Funding

The unaffordable subway

By Elizabeth Murphy, Common Ground Magazine, June 2016

Equivalent electric streetcar network deliverable for same cost of proposed Broadway Corridor subway (Prof. Patrick Condon, et al, 2008, “The case for the tram; learning from Portland, Sustainability by Design: An examination of alternatives to an underground extension of the Millennium Line to UBC.” Foundational Research Bulletin, No. 6.) Using electric trolley buses or a mix with streetcars would even allow much broader coverage across the region for the same funds as one subway on Broadway.

 

Providing an expanded and improved transit system is vital to Metro Vancouver and the provincial economy. However, the subway is a poor choice for the Broadway east-west thoroughfare. The current plans and funding models are promoted for corporate interests, but they are not in the public interest.

Last year, the public voted down, by a large margin, the plebiscite for a sales tax increase to cover the Metro Vancouver transportation plan. This plan is actually a real estate and tower development scheme led by a subway. Now the same plan is being put forward again – this time with much more problematic funding options that would put the public in unnecessary massive debt, without any pretence of public support.

The provincial government is failing to provide adequate funding for much needed transit while, at the same time, looking to benefit financially from development along an unaffordable Broadway corridor subway. So the civic level that receives only seven percent of the tax base is being required to take on this provincial funding responsibility (referred to as downloading) without the resources to fulfill it.

The province refuses to consider using the obvious and appropriate funding source: the carbon tax. Funding options being considered are property taxes and development that would be downloading onto cities. Transit fare increases add to the cost of living for those who can least afford it and further discourage transit use.

Property taxes are the main source of funding for civic governments that have correctly resisted provincial moves to try to take them for provincial purposes to fund transit. That resistance is now softening.

Although the property tax mill rate per thousand dollars of property value is considered low in Vancouver, actual property taxes are based on sky-high assessments that affect the cost of homeownership and are passed on to renters. Property taxes are already tapped out for civic purposes.

The proposed property tax increase for funding transit is a wedge in the door to future increases. Current budgets for the subway and the plan are likely way out of date and based on a previously stronger Canadian dollar. The estimates will go up significantly during each phase over the projected 10 years.

School Demolitions

Opinion:  Queen Mary heritage school demolition short-sighted

Province’s refusal to consider future school facilities costs more down the road

By Elizabeth Murphy, Special to The Vancouver Sun  February 12, 2016

Queen Mary Elementary School in West Point Grey is being reduced in size just as the adjacent Jericho Lands are being planned for substantial growth in population. This same short-sighted approach is about to be played out across Vancouver with about 20 school closures despite projections that the city is expected to grow substantially over the next 30 years. This lack of planning is undermining the next generations’ future.

 

Queen Mary Elementary School in West Point Grey is being reduced in size just as the adjacent Jericho Lands are being planned for substantial growth in population. This same short sighted approach is about to be played out across Vancouver with about twenty school closures despite planned projections that  the city is expected to grow substantially over the next 30 years. This lack of planning is undermining the next generations’ future.

In 2011, the Vancouver School Board undertook a public consultation process to redevelop Queen Mary Elementary School. This was prompted in part by the need for seismic upgrading of the two heritage buildings and partly because the school population at the time was expected to drop because of the opening of a new UBC elementary school.

At the consultation, the school board refused to consider future potential growth of the community with the expected redevelopment of the Jericho Lands. The consultation matrix of comparing various development options was using a baseline comparison of a new school reduced in size by 31 per cent from the existing school.

This was to be achieved by demolishing both the 1914 and 1926 heritage buildings. Fortunately, the 1914 red brick heritage building was retained and seismically upgraded. However, the 1926 Art Deco concrete heritage building has now been demolished along with the 1955 wing, with an overall reduction in size of 21 per cent for the completed facility.

The alternate option that residents were advocating in 2011 was rejected by the school board. It was to retain the full-sized heritage school, upgrade it seismically and repurpose any excess space until future school needs were established. This would have been consistent with the 2010 City Council-approved West Point Grey Community Vision direction that strongly supporting the retention and maintenance of heritage buildings.

The cost comparison to justify demolishing the heritage buildings was based on a new school being substantially smaller than what existed. But as it turns out, the larger-capacity school will in fact be required.

Planning for the federal Jericho Lands redevelopment is now underway. With the expected increase in school capacity requirements from Jericho, the newly upgraded school that is now almost complete is anticipated to be undersized. The school should never have been demolished and rebuilt on a smaller scale.

Chinatown under threat

Newest tower proposal too much for historic Chinatown

By Elizabeth Murphy, Special to The Vancouver Sun  January 8, 2016

The Dr. Sun Yat-sen Garden is a true gem for not just Chinatown, but all of Vancouver. Photograph by: Arlen Redekop , Vancouver Sun

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Chinatown is under threat from yet another tower. This time it is in the heart of the neighbourhood. The site is on Keefer Street across from the Chinese Cultural Centre and the Dr. Sun Yat-sen Classical Chinese Garden and Park, and adjacent to the new Chinatown Memorial Square.

Opposition to the recent design comes from many fronts.

The proposal by Beedie Living and consultants Merrick Architecture is to develop a new 13-storey mixed-use building with 127 residential units, 25 senior social housing units, and commercial use on the first two floors.

The Chinatown Historic Area Planning Committee, a city council-appointed group, voted against the proposal in November for the following reasons:

• Overwhelming concern for the scale of the development at a height of 120 feet, and concern that the proposed density is excessive for the site;

• concern over the livability of the units, and quantity and type of community amenity space provided in the proposal;

• concern that a richer mix of uses is required in the building;

• the proposal did 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 city’s Urban Design Panel also voted last month not to support the proposal.

News 1130 reports that former premier Mike Harcourt says 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, including the Dr. Sun Yat-sen Garden and the Chinese Cultural Centre.

“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.

Federal funding for transit

Federal funding should support an accountable transit plan 

By Elizabeth Murphy

Common Ground Magazine  November 2015

Article Link

As the new federal government considers going into debt to invest in transit, here are a few critical issues to consider.

Transit needs to be more affordable with more extensive coverage throughout the Vancouver region. Focusing on only a few transit corridors with very expensive mega-projects drains funding from the base transit needs of the network.

However, the public is being held hostage on transit funding until the mega-projects are built. We need affordable electric transit right now to deal with peak-hour demand.

The solution is obvious. Building a subway costs approximately $250 to $450 million per kilometre, streetcars $30 to $40 million per kilometre and electric trolley buses only $1 million per kilometre plus $1 million per double articulated electric trolley bus. Therefore, the electric trolley bus network should be used throughout the grid as a priority to disperse gridlock, using streetcar lines and subways only as we can afford them.

The City of Vancouver was designed as a transit-oriented city before the common use of the automobile. Within a five to 10-minute walk, each arterial supported our streetcar system, which was replaced by an electric trolley bus system in the 1950s. An expansion of the existing trolley buses now could eliminate diesel while providing more frequent rapid electric trolley bus service throughout the grid and reducing greenhouse gases.

Federal Housing Issues

Opinion: Federal action needed on housing 

Foreign investors: Funding and taxation regulations – even criminal laws – must be addressed

By Elizabeth Murphy, Special to The Vancouver Sun  October 17, 2015

Canadian cities like Vancouver need federal policies to address housing affordability issues. South False Creek includes CMHC subsidized housing from before the federal program was cancelled in the early 1990’s.

Full edition below:

Although civic infrastructure has become a federal election issue, housing has not had the debate it deserves. The federal government has a significant role to play in housing affordability; in funding of social housing and other housing programs; in tax relief as an incentive to the private sector; and in regulations regarding immigration and investment.

Funding of social housing and other housing programs:

Only about 7%  of the tax base goes to cities even though their citizens are primary contributors to the GDP. The federal government had a primary role in housing programs until the early 1990’s, at which time they cancelled the CMHC programs.

Social and co-op housing programs made economic sense. Rather than providing a public subsidy to slumlords, public funds went to pay off financing that eventually resulted in publicly owned assets. This was an investment in creating stable home environments for families and the most vulnerable in society while investing in the future. When we count the costs of reduced social impacts such as lower demand on health and judicial services there is a bargain. Most importantly, it is the right thing to do.

Federal Election: Transit infrastructure essential

Opinion: Civic infrastructure funding essential

Make investment in transit affordable, and democratically implemented

By Elizabeth Murphy, Special to The Vancouver Sun  October 3, 2015

JULY 2 2015. Transit troubles in Vancouver, B.C. on July 3, 2015. The vote is no for the proposed money for transit. Traffic congestion on Oak street. (Steve Bosch / PNG staff photo) 00037682A [PNG Merlin Archive] Photograph by: Steve Bosch , Vancouver Sun

 

Civic infrastructure has become a federal election issue and it’s about time. Only seven per cent of the tax base goes to cities even though their citizens are primary contributors to the GDP. There is a huge civic infrastructure deficit neglected by senior governments.

Public transit funding has been proposed by all the federal parties, with the Liberals offering the most ambitious plan. However, as we already learned from the failed transportation plebiscite in Vancouver, conditions on a number of fronts need to be met before transit is funded:

accountability, sustainable funding models, and a democratically-created affordable plan.

One of the main concerns in the Vancouver metro region is the accountability of TransLink. Ever since the province altered regional authority for transit by replacing municipal elected officials on the board with a provincially appointed board in the early 2000s, there has arisen significant controversy over TransLink’s governance.

After the plebiscite failed last spring, it was made clear that changes were needed. But instead of returning to the regional governance model of elected members, the province has again filled the board with appointments. This is going in the wrong direction.

As previously reported in The Vancouver Sun, the provincial NDP’s TransLink critic George Heyman has said the appointments don’t address the issue of accountability on the TransLink Board because more elected officials are needed.

Of further concern is that one of the new appointees, former Police Chief, Jim Chu, is employed by a major local development firm. He has been named vice-president of special projects and partnerships for Aquilini Investment Group. Heyman has also raised the issue of conflict of interest: discussions that would happen at the TransLink board about future transit plans will certainly affect land values and development plans.

To be effective, TransLink needs more local elected regional governance and less provincial interference.

The choice of appropriate funding models is another issue needing to be resolved. Public Private Partnerships (P3s) are sometimes used for public infrastructure. P3s may keep some debts off the governments books, but the public is paying for them nonetheless. Governments can generally raise capital debt financing at a lower rate than the private sector, so P3s provide no public cost benefits.

Another problematic funding model is what TransLink refers to as the “Hong Kong model”, where development is used to fund transit.

This means that rather than developers paying the city Community Amenity Contributions (CACs) towards civic amenities to service the increased population (such as community centres, parks, daycare, etc.), funding from CACs would go instead to the province to pay for transit which is the responsibility of senior governments. This is a form of the downloading of financial responsibilities to cities. It also means that large Metrotown-scale tower developments may be imposed as density bonuses for transit oriented development in established neighbourhoods without addressing compatibility with their community character or plans.

Which brings us to my last point; we need affordable transit solutions with plans that are democratically supported by the public and compatible with local community planning. One of the reasons the transit plebiscite failed was that the plan was not supported by the public. The plebiscite even failed in Vancouver where the main project was a subway on Broadway that would have brought in large scale tower development in Grandview, Mount Pleasant, Kitsilano and West Point Grey, while most of the region would continue with inadequate transit service.

Heritage retention a priority

Opinion: Retaining our character and heritage homes must be a priority

By Elizabeth Murphy, Special to The Vancouver Sun September 14, 2015

Elizabeth Murphy believes that Vancouver needs a balance of incentives to encourage retention that is fair to homeowners, so that home like the Walkem house can be preserved. Photograph by: Gerry Kahrmann , Vancouver Sun

 

To their credit, the city of Vancouver has been working on a heritage action plan. Although Shaughnessy has a moratorium on demolitions until a heritage conservation area is established, character houses continue to be demolished at a record rate across the city. It is critical that measures are put in place soon to protect heritage and character homes before this important housing stock is further depleted.

However, the devil is in the details. We need a balance of incentives to encourage retention that is fair to homeowners. There are ways this can be done. The city has many tools it can use, but the city also needs support from senior governments.

In addition to enhancing neighbourhood character and livability, retention of character and heritage homes aligns with the city’s stated goals of sustainability, affordability and family housing.

Sustainability

The best way to divert waste from the landfill is to adaptively reuse buildings. Less new material is used for a renovation than for new development. It therefore has a much lower environmental footprint.

Affordability

The existing older character and heritage housing stock is generally valued at close to land value. Renovation provides an opportunity for owners to add sweat equity to adapt to current needs at a relatively modest cost.

With incentives such as rental suites for mortgage helpers or extended family, this can provide economic advantages over owning a single strata unit. New houses are typically twice as expensive as the older stock.

When reviewing the single family (RS) zones, it should be kept in mind that there is no such thing as real single family zoning in the city. Now every RS lot can have up to three units; the main house, a secondary suite and a laneway house. This just needs to be rebalanced as an incentive to retain the character and heritage houses over demolition and new development.

Also, the RS zones are non-strata rental zones. There are a huge number of secondary suites across the city, mostly in the older character houses; these are some of Vancouver’s most affordable housing. If strata is allowed in RS zones this rental stock could be lost. Although strata can work well in some areas, this should be very selectively applied.