Preliminary analysis of City of Vancouver’s new Housing Strategy (goes to Council Tues Nov 28): Elizabeth Murphy

Vancouver housing strategy pie graph Nov 2017The City of Vancouver’s Housing Strategy report is scheduled for City Council on Tuesday November 28, 2017, for the staff presentation.  Speakers will be able to address City Council at the committee meeting on Wednesday, November 29. The public can write comments to Council or sign up to speak.

Report: “Housing Vancouver Strategy (2018 – 2027) and 3-Year Action Plan
(2018 – 2020)” (PDF, 6.8 MB, 248 pages, including all appendices):
Download PDF here:

(Note the City’s website appears to have been intermittent over the weekend, but seems to be up again. Just in case, we have saved it here for download.)

Here is a preliminary response by Elizabeth Murphy to the City’s Housing Strategy and to an op-ed that was in the Nov. 25 Vancouver Sun by senior City staff Gil Kelley and Dan Garrison (see text further below).


Preliminary analysis of City of Vancouver’s new Housing Strategy
by Elizabeth Murphy
(Private sector project manager, formerly a property development officer for City of Vancouver’s Housing and Properties Department and for B.C. Housing. Visit to see published articles)

This city housing strategy will affect most of the city even though the report recommendations have not had adequate community consultation. The text of the report was just made public on Friday, and it goes before City Council after just two working days.

There are both some positive aspects to this staff report and article, as well as many concerns.

First, it is positive that the City is finally admitting in a very public way that there is a problem with housing affordability that is being affected by foreign and investment speculative capital that treats housing as a commodity rather than a home for people who live and work here.

And further they admit that rezoning and increasing density is causing land value speculation. This is a huge admission that the City’s policies have contributed to the current situation.

However, the problem is with many of the City’s proposed solutions.

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 speculation created through increased density and rezoning. But the proposals are supply-based, and that will continue to put inflationary pressure on land values. Although the City is attempting to incorporate some measures of affordability, it is unlikely that these will be effective.

For example, the proposal to increase upzoning to allow new construction of townhouses, rowhouses, 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. It is impossible for the City to talk down the market values. We have evidence of this already in the Cambie Corridor. And to negotiate affordability into the projects will result in very large projects that will be out of scale with the surrounding communities. This larger scale, with or without affordability, will inflate surrounding land values as speculators’ expectations rise.

Character house incentives and multiple conversion suites can provide more affordability over the vast 60,000 RS-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. What makes Vancouver an interesting place is 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 a whole list of proposed tax changes in the proposed Housing Strategy. Some seem fair, but others could have unintended consequences and greatly impact local owners.

Tying property tax surcharges to income tax reductions would mean that only those with very 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 very 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 that will not likely work to make things affordable, and will actually make things worse, with increased inflation. We know that more supply has not brought down prices. We have been building more units over the last 16 years than what is required for population growth, yet prices have continued to escalate.

However, it is a step in the right direction that the City admits that rezoning and increasing density is causing land value speculation. Whether the City’s recommendations will provide the right kind of supply, as it claims will happen, is questionable and unlikely.


Below is the op-ed by senior City staff Gil Kelley and Dan Garrison.

Opinion: No silver bullet to solve housing crisis – addressing speculation is top priority
by Dan Garrison and Gil Kelley
Vancouver Sun, November 24, 2017
Vancouver is in the midst of a housing crisis that has reached the point of jeopardizing our city’s diversity and long-term economic resiliency. Over the past 14 months, the City of Vancouver has fundamentally rethought our approach to housing. After extensive engagement with expert stakeholders, partners from cities around the world, and over 10,000 Vancouver residents, we have developed a housing strategy that reflects the core values of our city. This week, Vancouver City Council will consider the outcome, a new 10-year housing strategy called Housing Vancouver.

Through the Housing Vancouver consultation, we have learned a lot about the factors driving up the cost of housing in our city. Vancouver is experiencing critical gaps in the supply of housing that is affordable to people looking to live and work here, especially rental housing. Vancouver is also experiencing high and sustained demand for housing, in part as a result of the region’s economic growth and its desirability as a place to live. However, demand from these areas alone does not explain why housing costs are outstripping incomes in Vancouver.

Over the past 15 years, the cost of a modest east side home has increased 350 per cent while real incomes grew just 21 per cent. Average rents went up by 70 per cent over the same period, spurred on by chronically low vacancy rates. The rising cost of land has also become a barrier to the development of affordable housing, with excessive speculation — the purchase of a property based on anticipated price growth rather than what it’s worth today — distorting land prices.

The role of investment and speculative demand as drivers of this surge in housing and land costs has dominated the housing cost conversation in Vancouver and other large cities. Investors around the world increasingly view housing as an asset that can generate large financial returns, or as a relatively safe place to hold wealth. The result has been the financialization of global housing markets, which has led to housing becoming an investment rather than a home. Vancouver is not alone in this, from Sydney to San Francisco to London and beyond, many cities are experiencing housing cost growth well beyond the earning power of the average resident.

In response to this relentless demand for housing and the dramatic price escalation that has resulted, Housing Vancouver proposes two bold solutions.

First, we need to address problematic demand and limit speculative investment in our housing market. The strategy’s main aim is to ensure that housing is used primarily as homes for people who want to live and work here and contribute to our communities. The City of Vancouver has already taken significant steps in this direction. We have introduced Canada’s first Empty Homes Tax to encourage owners to bring underutilized residential properties back into use as rental housing. New short-term rental regulations will limit the use of properties that should be providing long-term rental housing for short-term vacation rentals. We’re also proposing new requirements for pre-sales of condominium units that will see them offered for sale to locals first, before they are marketed and sold overseas.

The City recognizes that rezoning areas and increasing permitted densities can act as a catalyst by increasing the value of land. In order to limit land value speculation prior to the adoption of an approved plan, we’re adopting a new approach that evaluates the land value prior to the launch of new planning programs that reflects the development potential under existing zoning. We can set future land-use policies and public benefit strategies based on that evaluation. The city will put in place clear policies that require land value increases to be recaptured in the form of affordable housing and other public amenities.

While the city can take the kinds of actions outlined above, many of the tools for addressing speculation and investor demand rest with senior levels of government. Through Housing Vancouver, we have identified the need to work more closely with governments in Victoria and Ottawa to look at how the taxation and financial regulation systems can be brought to bear to limit the impacts of speculative investment on our communities. We want to collaborate with senior governments to explore how measures like flipping taxes and new approaches to property taxation could work. We also see opportunities to monitor and learn from approaches in other cities around the world, such as recent actions taken in New Zealand to limit foreign access to ownership.

While these actions will address the demand side of the equation, we also know that there needs to be more affordable housing. The actions in Housing Vancouver will facilitate a major shift toward delivering what we are calling “the right supply” — homes for people who live and work in the city — including substantial increases in rental, social and co-operative housing. We also know that we need more diverse and affordable options for families, such as townhouses and infill development. To achieve this shift, Housing Vancouver sets aggressive housing supply targets. About 72,000 new homes are projected as part of the new targets, with nearly half of these aimed at households with incomes less than $80,000 per year, and 40 per cent appropriate for families with children. Approximately two-thirds of new homes will be rental housing.

There is no silver bullet that will solve Vancouver’s housing crisis. Concerted effort on many fronts is required. The City is making sustained commitment over the long-term to create a healthy housing market that provides homes rather than investments, and we call on all levels of government and community partners to do the same.

Dan Garrison is assistant director of housing policy and Gil Kelley is general manager for planning, urban design, and sustainability, both with the City of Vancouver.

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