Saturday, March 15, 2014

How will City of Vancouver finance new social housing units in DTES?

Why the 60/40 proposition?
Following my presentation to Council on Wednesday, Mukhtar Latif, the City's new Chief Housing Officer and I briefly discussed whether the 60%/40% zone in the DEOD was proposed in order to dampen/reduce land values so that new social housing units could be built without capital funding from senior government.
I told him that that I got this idea from Brian Jackson, the City's Director responsible for planning. He surprised me by saying it was never the City's position.
Below is an excerpt from my blog posted November 16 2013 following a meeting with Jackson and Kevin McNaney on October 28th 2013. I offered Brian an opportunity to review my words before they were posted. His response is also available on my blog.

Meeting of October 28th, 2013 with Brian Jackson and Kevin McNaney

During our brief discussion, Brian and Kevin advised that they were proposing this initiative, with input from the City's Housing Department, in order to limit an increases in land values in the area. This was necessary, in their opinion, to facilitate the development of new social housing projects in the absence of Federal and Provincial funding.

When I questioned just how many projects might be viable under this scenario, (other than the out-of-scale Atira project which had been approved by Council the previous week), they responded that a study by Coriolis Consulting confirmed that under certain circumstances, projects would be economically viable.
Can social targets be achieved without senior government subsidies?
A related question on my mind is whether the City's social housing targets can be achieved if provincial funding is not available. The Mayor asked the same question during the Council meeting. I was surprised to hear Abigail Bond, a City housing officer tell the Mayor at the Council meeting the targets can be met. 
As recorded in a Vancouver Observer live blog:

2:33pm Robertson: Is this doable by the city, without provincial help? How far can we go with the 10-year plan without the Province or the Federal Government? 
Bond says the 10-year plan's "target levels are deliverable" by the City on its own, and there are also options that take into account assistance from higher levels of government.

The Coriolis Consulting feasibility study

When I questioned Brian Jackson on the economics of building social housing without provincial capital subsidies, he promised to share the Coriolis report, once the LAP was released.

Members of the LAP committee, UDI and I repeatedly requested this study, since it would have helped us all understand whether the projects would indeed be viable without capital funding from the province. And if not, how much subsidy would be required.

For reasons I still cannot understand, the City refused to release the study. The only explanation is a comment recorded by Doug Ward in an interview with Andrea Reimer which I reported during the Council meeting. When I referenced this at the Council meeting Councillor Reimer said she was misquoted.

Here's a link: Here's the excerpt:

Reimer said the planning department isn't prepared to release the Coriolis analysis because the data on potential land values could undermine the city's ability to promote rental development in the DEOD.
"If we released the exact range of what we were looking at paying for land -- which is what the Coriolos report does -- then the maximums in that report would become the minimum current landowners would set as the asking price," said Reimer. "Put another way, no one goes into a real estate deal letting a seller know the maximum they can pay."

I share this since I believe the City needs to be more forthright in terms of why the 60/40 strategy was put in place, whether it will allow social housing to be built without capital funding from the province, and what might happen if provincial funding is not available. Is all the necessary subsidy going to come from the City? I don't think so. It has only budgeted $50M over 30 years. Or is it expected to come from CAC's paid by developers? This is equally unlikely.

I think the City should release the proformas that Coriolis prepared, even on a confidential basis, so that people can see just how much subsidy will be required under the 60/40 proposition.

Will ownership housing be permitted in the 'no-condo zone?

Releasing the proformas might also clarify whether Coriolis factored in potential revenues from the 1 FSR condos which some believe can till be built in the 60/40 zone. I say 'some' since while Brian Jackson and Ray Spaxman previously told me this was intended, this is not clear from the plan, and the CCAP and many others will not accept any condos in the 'no-condo zone'.

I will be pleased if some condos are permitted . However, I doubt whether they will significantly change the overall social housing economics. This should be clarified for the LAP committee, UDI and CCAP prior to the Public Hearing.

1 comment:

Anonymous said...

You can't fight City Hall. Nor should you question City Hall, or even bother to protest anything they ram through these days. Even the most insane planning proposals will be passed, all we can do is watch.

And they get re-elected every time.