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Secret plan by Vancouver city council to increase requirements for social housing?

Question: I have heard that city council plans to amend the Oppenheimer sub district zoning to require 60% social housing in any new development, up from 20% in the current official plan, meaning that it will be uneconomic for private developers to build anything, resulting in taxpayers paying the whole shot for any development in the area.  Is this true, and is it true that this announcement is being held back until after the next civic election?

This is the kind of question that is breaking my heart these days. There’s a stream of conspiracy theorizing that’s always run through this city, but it’s swelled to a raging river lately. (Is that a block that metaphor sentence? Perhaps.)

Yes, council does plan to amend the Oppenheimer sub-district zoning to require 60 per cent housing in any new development. But the rest of this question just makes me sad, for various reasons, which I will explain.

1. The announcement is not being held back until the next civic election for I assume you think nefarious political reasons.

It’s been out there and is being debated endlessly. Development consultant Michael Geller has been railing about it here and there and everywhere, while various people have defended it. It was discussed at some length at a recent community meeting in Strathcona. Just because you don’t keep up with the news doesn’t mean something is being hidden and/or is a conspiracy. (BTW, for those who still don’t realize it, I don’t have any idea who sends in questions. My blog form somehow eliminates the email addresses that questions come from, so you are all completely anonymous to me. I have no idea whether you are a developer or an activist in the area or what.)

2. As I’ve been given to understand recently by Ray Spaxman, the former city planning director who has been labouring hard in the trenches of the Downtown Eastside to help people there prepare a proper response to the city’s proposed plan for the area, saying “60 per cent social housing” is not quite accurate. Nor is Michael Geller’s assertion that the new proposal blocks any market-condo development in the area at all. Ray said that the proposal calls for any new building that is LARGER THAN the current building size allowed in the area has to make any of the additional space all rental, with some of that being rented out at below-market rates.

A developer can still build 1 FSR of for-sale condos in the new project. (For those just joining the urban-planning world, 1 FSR means you can build a building to the equivalent of the square footage of the lot. So if a lot is 33 x 100, the building can be 3300 square feet, in whatever form you want. One floor of 3,300, two floors of 1,650, three floors of 1,100, etc.) The remainder has to be rental. Sixty per cent of that rental has to be “social housing,” which means, in essence, that it’s below-market in some way. The city’s formula is that a third of that should be deep subsidy (so essentially rented out at welfare rates), a third at shallow subsidy (so rent at 30 per cent of the person’s income, for those who are low-income but not on welfare), and a third at prevailing market rates in the area for all apartments (so you can’t charge the normal rent that you’d get for a new unit.) That’s a super-shallow subsidy, but does encourage people of a different income group to mix in.

3. It will be uneconomic for private developers to build anything, resulting in taxpayers paying the whole shot for any development in the area.
 My dear friend, what are you talking about? If it is uneconomic for developers to build anything, they won’t build. The city doesn’t own any of those buildings. The city has not committed one dime to helping out with subsidies that I know of to this point. You’re right, in that questions have been raised about whether any developer will see this as workable and whether the formula should be adjusted. But city tax money? Where do you get that from?

BTW, I should point out that the goal of something like this is to stop buyers from paying inflated prices for the land, which also helps with all properties in the area to prevent speculation. If a developer is considering buying a piece of Downtown Eastside land and knows that the city requirement will only allow him or her to build a limited number of for-sale condos and a limited number of market-rate-rental apartments, that will prompt him/her to offer a much lower price for the land in order to make the pro forma work.

For all you other listeners, if I have mucked up any details of this somewhat complex topic, please weigh in. Wouldn’t want any MORE crazy misinformation circulating, because I think the circuits are loaded already on that.

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  • http://matt matt

    one thing to mention. developer’s were getting 1.5 FSR in this area, and social housing requirements were 20% of units, not of FSR, so this is a big step up and makes the area undevelopable. you are correct that land prices will have to come down to make the pro-forma work, but my rough numbers indicate that values would likely be pushed almost to zero…which obviously won’t work, and the area will stay status quo

  • Norman

    Looks like you may have bought the spin, Frances.

  • nathan

    the point of the plan is to lower the lowest land prices in the city and have the struggling middle class owners have there investments destroyed to reduce the over all cost of the housing projects lowered. This is a cruel practice and the cost per build-able foot in this area is already distorted by the fsr restrictions already imposed on the private sector while the city and province come in and build 5 fsr and now an 8.2 is proposed by Atera. The current plan is more than enough to restrict land values. The proposed plan is an expropriation strategy that intends to have current land owners be sacrificed for a nominal overall reduction in costs. The buildings cost most of the money by far!!! Developers and speculators have steered away from this area for years. Much of the land other than what is owned by the city and province is in the hands of owner operators, they should not be further punished by this political agenda to stop homelessness. So many people planning what to do with other peoples land so typically disturbingly Canadian

  • http://www.gellersworldtravel.blogspot,com Michael Geller

    This is not a secret plan, but it is an ill-conceived plan.

  • nathan

    Indeed no secret , but I would ad an eve to the ill.
    The spelling would be wrong but the message would be clear, unlike this plan. An experiment about to go wrong.

  • http://www.gellersworldtravel.blogspot,com Michael Geller

    A few more thoughts…

    Firstly, Frances is absolutely correct. There is nothing secret about the City’s proposed amendments to the plan for the Downtown Eastside and the DEOD, a smaller area that forms the core of the neighbourhood. They have been under discussion for some time, although the details are still coming forward.

    Frances is also correct in noting I have been railing about one aspect of the DEOD plan here, there and everywhere. You can find a Vancouver Sun op-ed that I initially wrote on the topic on my blog.

    There you will also find comments from Brian Jackson and others in response to my railings!

    I have a few concerns. The first is that this proposal is likely to result in a more intense unhealthy concentration of social housing in the DEOD, rather than a more diverse, mixed community. While it now appears that some condominiums may be permitted, all new developments above 1 FSR must be 60% social housing. 40% must be rental.

    While some may say, surely the city knows best, I do not agree. To prove my point, I would ask you to look at what’s happening at Marguerite House, one of the 14 new social housing projects on City-owned land. I am told it is so dysfunctional that the City has not been able to arrange an opening ceremony for the building.

    Why? Because I am also told the City Manager’s office insisted on a very high concentration of homeless/hard to house people in the building, against the advice of the BC Housing and the n0n-profit sponsor.

    I worry that the same sort of problems will exist on a broader scale in the DEOD.

    I am not alone in my concerns. They are shared by many of the non-profit organizations and Business Improvement Areas that operate in the community, as well as architects and property owners. Again, you can find their lengthy submission to council on my blog.

    My second concern relates to building form. The City is essentially ‘down-zoning’ an area of the city in the hope that this will dampen/reduce land values to allow social housing to be built without capital subsidies from senior governments.

    Many real estate professionals question the economics of this happening unless there are substantial density increases, similar to that recently granted to Altira for a 14 storey building on Hastings Street. I predict this building will be completely out of scale with the surrounding community.

    Thirdly, without significant density increases, I and other real estate consultants question whether new projects can be built with 60% social housing and 40% rental housing without subsidies from the province. In which case, few new buildings will be built. Some people surmise that this will be just fine with some local activists as long as no condos are built. Their goal is ‘no more condos’ and the planning department seems to want to oblige.

    In summary, while I agree that the DTES and DEOD should remain a predominantly low income community, it needs new development and more balance to be a healthy community. It needs residents with money to support local businesses that can open up in the derelict storefronts.

    It needs the CACs and DCCs that come from condominium development to support the funding of new community parks and other amenities.

    In other words, the DEOD needs to become a more diverse, healthy community.

    Hopefully others will agree with me and take up this cause, since I know City staff and politicians are tired of my railings!

  • nathan

    I believe many agree with Michael. The visioning sessions done by the Strathcona BIA and the Strathcona Residents associations both call for
    a more balanced community and that will indeed lead to filling the derelict store fronts making a safer community for all. The scale of the current City & BC housing projects has further shifted what was already an imbalanced community. Many had thought they were getting ahead of the game for private sector projects that were soon to come. Many have been waiting for a long time ,some land owners up to 30 plus years for a better opportunity to improve this area. This plan comes as a huge disappointment to many. The expectation I had with the plan was for diversification without displacement. More social housing , lots more rental housing and market housing . Ideally live work studio space that come raw and basic letting tenants build equity through owner based improvements post sale . Pride of ownership builds community.

  • nathan

    I believe there are more artists in the deod than in any other postal code in canada! They need more housing and studio space. Artists are comfortable
    part of the mix in the area and they need dedicated housing, not any focus on this subject in the plan. Artists often precede gentrification but then are forced to move on . This pattern has gone on forever and very little dedicated space for the creative sector is ever created, this needs to be part of the plan.

  • http://reflectingvancouver.wordpress.com Chris

    Developers will balk at the 60% social housing requirements now, but with ever-diminishing CD-1 land across the city, I doubt they will do so indefinitely.

    Mixed-income development is a holy grail of Vancouverism, and I criticize the City for not doing enough about it in other neighbourhoods, but Vision is particularly vulnerable on their left flank regarding gentrification in the area. This plan reflects that.