What to do with the 252 Social/Rental Housing Units at Olympic Village

The following are notes that I posted on Frances Bula's blog (www.francesbula.com) in response to the news that the Province has rejected all of the proposals to manage the social housing and market housing units at the Olympic Village, and the City wants to go it alone...which appears to mean it will be guaranteeing another loan which it was hoping the Province would guarantee:

I hate to keep dwelling on this, but I think the city will make a bad situation worse by ignoring the messages coming from the province and trying to ‘go it alone’ with the Portland Hotel Society.

I would like to make it clear that I am not normally opposed to mixing market and non-market housing. As the federal government’s Special Coordinator for the Phase One redevelopment of the South Shore of False Creek, I helped the city achieve its one third low income, one third mid income and one third higher income social mix. As Program Manager-Social Housing for CMHC I oversaw the development of thousands of social housing units, many of which were integrated with market developments. As the President of the SFU Community Trust I helped create a social mix by including both housing for students in smaller ‘suites within suites’ and non-market faculty and staff housing at UniverCity.

However, in this particular situation, I think the time has come for the city to admit that it might be better to accommodate lower income households on the immediately adjacent City-owned sites , and allow some or all of these 126 social housing units and 126 market rental units to be sold as more affordable ownership units.

Priority could be given to those seeking ‘workforce’ housing in the city including firefighters, police officers, school teachers, etc. To differentiate this housing from the market condominiums, the land could be leased, rather than sold.

Over time, as the city’s financial position improves, some units could be bought back and used social housing, if so desired.

I reiterate this suggestion since it would help the city recoup its costs, and maybe even make a small profit, rather than incur over $60 million in subsidies, some of which are being used to subsidize high income people to move into the market units.

According to the staff report that was considered by council last April, the city could make up to $60 million+ by selling the units. That’s a $120 million+ swing between renting and selling.

City staff feared that selling these units would negatively impact the sale of the market units. I would suggest the opposite is true. If the Portland Hotel Society, (which I understand to be the preferred bidder, and which has an admirable track record dealing with the hard-to-house in the DTES) is the selected operator, many potential buyers of the condominium units could be deterred from buying. We are starting to hear this message from many real estate experts and urban commentators. In other words, this type of social housing could reduce the value of the market units.

Another reason why I am so concerned in this instance is that mixing the very rich with the very poor usually does not create a good community. This is very hard to do successfully. I would note that former city alderman Libby Davies (whose judgment and compassion I have often admired) and housing advocate Jim Green supported this view when consideration was being given to housing the very rich and very poor together at Bayshore in Coal Harbour. In the end, politicians from all political parties agreed that a ‘payment in lieu’ was a preferable approach for some of the units, and the Performing Arts Lodge was approved for the balance. This ended up as an award winning solution.

Another reason for selling the units would be to reduce the city’s potential losses on this development. I do not pretend to know all the numbers, but I do know that the city was counting on getting the balance of the $193 million land payment to pay for the cost of the extensive infrastructure and community amenities. While we don’t talk about it, I have been advised by city staff that most, if not all of the city works have gone over budget. The land payment from Millennium was to cover these costs. Now it appears this payment may not be made.

In addition, the city has lent Millennium the money to complete the project. I am advised that the city is not likely to get all of this loan repaid from the proceeds of the sales. The only question is how much are we going to lose. By selling the social housing and market rental units the city to could help reduce potential losses.

(If it is politically impossible for this council to sell the social housing units, then at least sell the rental units. Why should we as taxpayers be subsidizing people to live in them? And we are, since the proposed rents, even at $1600 a month and more, are not sufficient to cover the costs and a nominal return on equity.)

Furthermore, Millennium is having some difficulty renting its 129 market rental units. That’s right. Millennium has rental units that are only 35% leased to date. And the city still hasn’t rented all of its units at 1 Kingsway after 9 months. Why bring more market rental units to market, especially when no one appears to want to manage them.

Some will say that my comments should be ignored since they are just politically motivated. They are not. Rather they are based on four decades experience in the development of market and non-market housing across Canada. They are based on what I think is common sense, rather than political ideology. As I said on the Bill Good Show, I think this Vision Council is often well intentioned, and it has accomplished many good things. But it has made a number of mistakes, and continuing to try and keep these expensive and inappropriately designed units as social housing and market rental housing could be a very damaging and costly mistake.

I therefore urge the City administration and Council to not ‘go it alone’. Please reconsider your April decision in light of the current situation. And if someone tells you that you can’t go back on a pledge you made five years ago to the International Olympic Committee, tell them that the situation has changed. There are some urgent housing needs in the city, and this is the most prudent course of action. I am confident that they will understand.

In summary, in time the Olympic Village will be a wonderful community. But it needs some wise decisions over the coming months, to help this to happen. Let’s start by reconsidering the future of these units.