Social Housing at what cost?: Allen Garr in the Courier

The following story appeared in the Friday March 26, 2010 Vancouver Courier headlined Social housing at what cost? by Allen Garr, Vancouver Courier

No matter what Mayor Gregor Robertson and his Vision council decide to do with those incredibly costly 252 social housing units at the Athletes Village, they'll be left with a political problem.

Their own supporters are already at odds over solutions. And, come the next election, you can be sure COPE and the NPA will feast on all of this. A project that started at $65 million is now north of $110 million; this could be the most expensive per unit social housing development on the planet.

How did we get here? One significant decision took place under COPE and former mayor Larry Campbell. But many of the decisions that drove the cost up happened while ex-mayor Sam Sullivan and the NPA were running the show.

It was Campbell's council that decided to accept a recommendation from their law department that the title to the land would rest in the hands of the city throughout the development. The argument was that, because the city had an Olympic deadline, this arrangement would allow them to jump in to finish the project if the developer faltered.

I'll get back to that in a minute.

When the NPA swept to power they dramatically reduced the social and low-cost housing components, arguing they were too expensive.

But it was with council's unanimous selection of Millennium as the developer that they really drove a stake into the heart of the social housing option. And that happened before even one yard of concrete was poured.

Three proposals were considered by staff. Based on the "assessment matrix," Millennium was last. Then staff decided to include the price Millennium was offering for the land --$193 million and far more than the other two--as part of the assessment. Millennium jumped to the head of the queue. And council grabbed its offer.

Other developers were stunned at the price. Longtime Vancouver architect/developer Michael Geller figured it came in at about $225 a square foot, double what land was going for in Vancouver's downtown core. There was no way, he now agrees, that starting with that land price you could ever produce social housing.

Then there was another problem. The other two bidders were apparently prepared to self-finance the project. Millennium had to go to the market for money. And with the decision the previous council made about holding on to the title, conventional Canadian lenders were not interested. Enter a very costly New York hedge fund.

Added to the high land cost and high interest rates was a red-hot construction market. The costs of labour and materials were escalating almost daily. Then the project was fast tracked to make the Olympic deadline.

Geller says poor and inexperienced management at both the developer level and the city aggravated matters in terms of cost. The green elements of the building could have been done for a lot less money. The architects had Champagne tastes. The change orders to the social housing portion of the project were dutifully followed by a developer who was working on a cost plus basis. Costs on the Athletes Village were running over projections to the point the city had to step in to shore up its investment, which is about the time of the last election. Welcome Robertson and Vision. This problem was dropped into their laps.

Now for some options: If they keep the units as social housing they will have to dump another $55 million in to subsidize it. But that would score them points on their left wing. If they sell the units and use the money to build social housing elsewhere--an option preferred by Geller and some Vision folks--they will be denounced as traitors to the original concept of an economically diverse neighbourhood. Builders for the rich.

Holding on to the units and renting them out at market rates will satisfy neither the left or right. A staff report with recommendations for council is expected next month. It should come with two Aspirins.

agarr@vancourier.com

While I don't always agree with Allen Garr, (and he doesn't always agree with me), we have been having a dialogue regarding the cost of the Olympic Village housing for years. He called me immediately after the Millennium bid was announced and I said at the time that I thought they had bid too much money. I was quoted as saying it was the highest price ever paid for a residential property anywhere in Canada; although Al Poettker of UBC Properties Trust phoned me afterwards to correct me...he said someone had offered slightly more on a price per square foot for one of his UBC sites, based on 'present value' calculations.

While I question Garr's statement that the other bidders Concord Pacific and Wall Financial would have 'self-financed' the project, (they too would have borrowed money, but both had very substantial assets that could have been pledged) and I can't verify the estimated $55 million additional subsidy requirement....that number didn't come from me...

Garr correctly notes that this is an extremely important issue, and whatever Vision councillors decide, it will be wrong. For this reason, I hope they will do the right thing.

A few more details that I shared with Garr:

1. The 'social housing' was never intended to be all social housing. That's right. In order to ensure a broader income mix and reduce subsidy costs, only half the 252 units were to be leased to 'core needy' income tested-households...the remainder were to be leased at the lower end of market rent to anyone lucky enough to get in line;
   
2. On this basis, the cost works out to about $800,000 per low income social housing unit, plus land;
3. The social housing units were never intended to accommodate homeless people. They were designed for low income families with children, and seniors on Province and City wait lists.
   
4. My proposal was not to just sell the units. It was to sell the units as 'FETTERED' AFFORDABLE OWNERSHIP HOUSING, so as not to compete with the market units to be sold by Rennie on behalf of Millennium. This is was what Vancity and SFU did with Verdant, on Burnaby Mountain.
   
5. What does this mean? For one thing, the land would be leased, not sold. Secondly, units would not be sold to investors; they would be sold to 'end-users' with priority given to Vancouver firefighters, police officers, emergency workers, teachers and others who work in Vancouver, and would like to live here.
6. There could be 're-sale controls' which keep the units more affordable over time, and give the city the right to buy them back;
   
7. Not all the units need to be sold....Some less desirable units could be retained as social housing from the get go...
8. Replacement social housing units could be built on lands immediately adjacent to the Olympic Village. This would ensure the desired social and income mix.

I appreciate Allen Garr's efforts to provide a spotlight on this issue. It is very complex, and politically challenging. When I spoke on CBC last week, Rick Cluff commented that if Council votes to sell the units, they will be seen by some as having lied. He's right.

But as Garr points out, Councils of all political stripes have contributed to the current mess. I think it would be financially and socially irresponsible to keep these units as 'social housing' when the need for housing for the homeless and others who are truly desperate are so great.

One last thing. The suggestion that the city hold onto the units and rent them out seems logical, but is the worst of all worlds. For one thing they would still have to be heavily subsidized and could compete with Millennium's rental units (assuming they stay rental units)

Furthermore, the city needs the money. There is no guarantee it will get the money promised by Millennium for its loans and land payment. It has also gone millions of dollars over budget on the South East False Creek shoreline works, community centre, parks and other facilities...but that's another story.

Globe 2010: A few observations

I was interested in the following on-line The Tyee account of a panel discussion that I attended yesterday at the Globe 2010 conference....

No room for single-family zoning in Vancouver's future: panel

By Colleen Kimmett March 25, 2010 12:50 pm

Vancouver could halve its greenhouse gas emissions simply through rezoning laws, said one of the city's leading green building architects today.

Peter Busby, of the firm Busby, Perkins + Will, joined Mayor Gregor Robertson and former mayor Michael Harcourt for a panel discussion of the future of cities, part of the GLOBE conference on business and the environment.

Rest assured, said Busby, there is no room for single-family zoning in cities of the future.

"We have this vast area of single-family residents. These are the models that emerged out of city planning post-war, when planning departments were set up," Busby said. "They largely thought this was the right thing to do. . . put all the officers together. . . you live out there in your houses, and over there is where you shop.

"But it's the wrong model today."

By creating 'nodes' around the city of dense, multi-use buildings clustered around major transit stations, the average Vancouver citizen could reduce annual greenhouse gas emissions from five to 2.5 tonnes, said Busby.

While all panelists agree that public education and outreach is key, they acknowledged that rezoning is a contentious issue and political hot potato. Mayor Sullivan's plan to brand and sell 'EcoDensity' was also a focal point for resident backlash against city-wide rezoning efforts.

Robertson said 'EcoDensity' was really just a bundling of existing city practices and planning, and said residential groups felt left out of the process.

"My approach has been, let's embrace this all together," Robertson said. "Keep them in the dialogue."

He pointed to city council's recent approval of laneway housing as a positive for density and individual property values.

Although it will take a "Herculean" effort to change zoning patterns, not just here but around the Western world, Busby said two trends offer a great opportunity for densification: Single-family homes passing from one generation to the next, and growing immigrant populations from countries like Asia where high-rise apartments, walking and public transit are typical.

"Single-family ownership of a place to live is incredibly important in this society," said Busby. "But there can be many forms of that."

Colleen Kimmett reports for The Tyee.

The following are a few observations on this panel discussion, and the Globe conference as a whole...

The first Globe conference took place 20 years ago in 1990, just as concern for the environment was beginning to become a regular front page story. As the President of UDI Canada, I was invited to speak at the inaugural event on the topic of real estate development and the environment. Working with my then speech writer Frank O'brian, we prepared a talk on how real estate developers could actually enhance, rather than destroy the planet. My speech outlined things like brownfield development/site remediation, densification, and transit oriented development as three examples of what should be done.

Just before starting my talk with panelists from other parts of the world, I realized that I was the only speaker from North America. So I decided to start out with how proud I was to be representing not just Vancouver, or British Columbia, or Canada, but my continent. At this point, from the back of the room, a lady stood up and shouted out "And I don't think there could be a more inappropriate person to be speaking!"

She wasn't a delegate, but rather one of the people who had been protesting the Spetifore Lands Development, with which I was involved at the time. She had read in the newspaper that I was a speaker, and had decided to crash the event. I never really recovered from her intrusion!

At this year's event, I attended the session described above in The Tyee story. There was no one there to heckle the Mayor, or Peter Busby, or Roland Aurich, President of Siemans Canada, or Mike Harcourt who moderated the panel. But it was a very interesting discussion and worth commenting upon.

Just after the Mayor finished his presentation, the person next to me whispered "he looks like Clark Kent but sounds like a politician". It was true. However, I will say that the Mayor seemed very comfortable and relaxed talking about the future planning of Vancouver, and comes across as a much better speaker than two years ago, when I first heard him.

Peter Busby's presentation is a must see for anyone who cares about the future of the city. While he somewhat wavered on whether we really need to replace all lower density single family housing around the city, his basic notion of creating a network of mid and higher density mixed use 'nodes' is worthy of careful consideration. Essentially, he is proposing an arrangement that would result in densification not only along main arterials, but at the intersections of secondary arterials...such as 16th, King Edward, 49th, and 57th and corresponding north-south streets. This would allow people to walk to shops and offices, rather than always having to get into their cars. The following image was not in his presentation, but is an illustration of an idea his firm put forward in a recent Vancouver design competition....Peter illustrated the GreenHouseGas impacts of different forms of development...comparing the West End with Kerrisdale and lower density areas. His conclusion was that the nodal approach would allow single family areas, with a mix of low and mid density forms to continue, while still allowing us to reduce GHG's significantly.

The first questions from the floor all addressed the most obvious challenges...how to get neighbourhood residents to accept increased density nodes, on lands currently occupied by single family homes. The mayor correctly talked about the need for political will. I'll be curious to see if he is prepared to demonstrate such political will when rezonings do come forward...so far he and his councillors did rightly support a higher density proposal at W41st and Balaclava.

However, I do have to somewhat disagree with the Mayor's assessment of why EcoDensity failed and the beneficial impacts of Laneway Housing. While I have been a longstanding proponent of this housing forms, and statistically he is right...there are 70,000 single family properties where laneway houses could be built, I doubt whether we will see any really significant take-up of this idea, as it is currently structured.For one thing, the forms of housing most people would like...a small flat over a two-car garage, or a single story inexpensive 'modular' home, such as I was proposing, are not permitted on most lots. Secondly, with the complex approval process and considerable fees, the total cost for a small rental unit is too high for most homeowners. (My understanding is that to date, about 33 laneway homes have received City Hall approval, and another 36 are in the system... quite modest numbers. I am also told the total cost is closer to $250,000 than $150,000 for a unit not much more than 500 sq.ft.) If the units could be sold off, the response might be quite different.

After listening to Peter promoting grey water recycling and a variety of other engineering innovations, I had to ask the panelist how to deal with government bureaucrats who are usually reluctant to allow such innovations to be constructed. Former Mayor and Premier Harcourt jumped on the question, pointing out how the Fire Marshall often determines the width of roads in communities, to ensure that two fire trucks can pass each other....etc. etc. The Mayor astutely observed that it is often a question of risk, and politicians have to encourage and support officials to take these risks when they have environmental benefits. He pointed to the 'district heating' system at South East False Creek as a good example of what can be done.

As for the gentleman from Siemans, he preferred to focus on the global perspective...his company is one of 70,000 truly global operations, with a very impressive array of products in energy, transportation, health care, etc. His company is keen to serve the increasing number of mega-cities rising around the world. So the challenges of a rezoning in Dunbar didn't really cross his radar. But he had some nice pictures.

In the afternoon, I moderated a panel on Smart Cities with David Helliwell, co-founder of Pulse Energy (a company that can measure energy consumed by buildings and communities), Eamann Percy, President of Powertech, BC Hydro's subsidiary specializing in clean energy; Anthony Haines, the new President of Toronto Hydro, and Hellmuth Frey, a gentle engineer overseeing a major project in Germany. I learned about new technologies that allow electric power to be distributed and energy to be priced according to the time of use, and other innovations to reduce consumption and GHG's.

In the audience was Dianne Watts, Mayor of Surrey and some of her councillors. I was impressed that they would take the time to attend Globe and learn about such innovations. It seems that Helliwell is already working with Surrey....he's someone to watch! And so is the Mayor of Surrey!

The Smallest Housing Unit in the World

Sometimes, you just have to be creative to reduce the size of a home!

Images of Phoenix

Travelling around Phoenix earlier this month I came across some interesting sights. Here are a few images that I thought were worth documenting:Along Scottsdale Road, I came across this motel which I thought noteworthy for its decorative concrete blocks. It's a very simple detail...but most effective. I'm wondering whether it might work here...it might look terrific with some snow.

I can't help but wonder how the architects managed to convince the client for this Waterworks Building to agree to this unusual, and probably expensive detail, which combines local rock with reinforcing bars. I was surprised to find a similar detail at Spaces, the new condominium project that I described in my earlier Vancouver Sun article.How can you not be intrigued by a city that names a major street after a major architect?I was surprised to see people holding signs at major intersections, until my friend Craig explained that signage bylaws prevent permanent signage!I didn't see a lot of Toyota Prius' but those I did see had special license plates...Along the highways...and there are a lot of highways, I was very impressed with the public art incorporated into the walls...this is much better than anything along our recently completed Sea to Sky highway.Just north of Scottsdale I visited the Boulders Golf Course, one of the top 100 courses in America. Why do they call it The Boulders?Had space permitted, I would have written about Optima Camel View Village in my Vancouver Sun story. This development, on Scottsdale Road, across from the Fashion Mall, includes some very attractive mid-rise apartments with large terraces, outdoor gardens and interesting panel details. Inside, the units featured very large kitchens with adjacent 'utility rooms' with washer/dryers, storage cupboards, and a large built-in freezer. This is a very attractive feature for most households moving out of a house. Far too many Vancouver developments forget that many households have freezers...you shouldn't have to give them up when you move to a condominium apartment or townhouse.And finally, there are some very good steak houses in Phoenix, and I had an excellent steak with my friend David, but the best meal I had in Phoenix was this bar-b-q'd tuna prepared by Craig and Coralie. With a few Waddell-tini's (half gin, half vodka).

Reserved Parking: Mayor Derek Corrigan and Michael Geller

You just know there's a story here! I mean, what circumstances could possibly lead to the Mayor of Burnaby and me having reserved parking spaces side by side?

The occasion...the opening of Nat Bosa's Affinity project in Brentwood...we were both invited to speak at a special opening for realtors. Even though Bosa has been one of the most active developers in Burnaby, it turns out it was the very first time that Nat had met the Mayor.

It was most amusing watching the two of them together. It was the very first time I have ever seen the Mayor, of whom I'm very fond, struggle to get a word in edge-wise!

Meeting Princess Marta Luisa of Norway

On Friday afternoon, I was pleased to join Councillor Suzanne Anton at a reception organized by Stein Gudmundseth, the Honorary Consul of Norway for Norwegian paralympic athletes. In attendance was the Princess of Norway, a very beautiful thirty something woman named Princess Marta Luisa.

Upon being introduced to her, I had to tell her my story. I once slept on her front lawn.

It was 1969 and my friend Eli Harari and I were touring Europe. Eli had taken our little NSU Prinz 30 up the Norwegian coast to visit the fjords, and worrying that the car wouldn't make it, I decided to stay in Oslo for a while on my own. Each night I would go to a bar or club to find someone who could provide me with a place to sleep; however, one night, I was unsuccessful.

After wandering around the city, eventually it was time to find a good place for my sleeping bag. I saw a large park, and decided to hop the decorative metal railing and went to sleep.

At about 4:30am I was awoken by a soldier in full military dress, pointing a rifle and bayonet at my neck. He said something in Norwegian but I didn't understand. I pulled out my British Passport and he then said, "You can't sleep here. This is the palace". He then escorted me off the grounds. As I left, I took a photo, to remind me of the event.

Never in my wildest dreams did I expect to be telling this story 40 years later to a resident of the palace!

The Princess was very graceful and invited me to come back to Oslo in the summer. She said the Palace is open to the public and I can see inside. But she didn't invite me to sleep over.

Thank you Stein, Suzanne and Princess Marta for a wonderful opportunity to re-live a memorable episode from my past.

This 24 Hours Story Really Upsets Me...

I was really bothered by this story in Thursday's 24Hours...please read it...I think you will know why.

EXPECT MORE TENTS IN THE CITY

MATT KIELTYKA - Look out Vancouver, more tent cities are heading your way.

About 30 people were left at 58 West Hastings Wednesday to gather the last of their possessions before vacating the Concord Pacific-owned land, which served as a demonstration of the city’s homeless issues during the Olympics. The protest spurred BC Housing into action and discussions are underway to find all the homeless at the site a place to live.

The lesson? “Tent villages work,” said social advocate Wendy Pedersen,

of the Carnegie Community Action Project. “That’s the wave of the future,

when [cold weather] shelters close April 30, there will be more tent cities.

When people put themselves in front of the media and public with their friends, they get housing.”

Richard S. Buttery recently arrived from Toronto and bounced around

between shelters and hospital stays before landing at the tent city.

Now he’s looking forward to the clean, warm bed that awaits at the end.

“There was no place to put me, but I had a good experience here,” he said. “I

agree what the people here are saying, it did something for the people here.”

But while a few dozen people can look forward to a fresh start, Buttery said the

struggle isn’t over. “Go outside this fence and go up a block or two,” he said,

pointing towards Main and Hastings streets. “Those are the people the government needs to get off the street any way they can.

So what's my problem?

It's Richard S. Buttery, who recently arrives here from Toronto, and 'bounces around' between shelters and hospital stays, but thanks to the organizers of the Red Tent Campaign, now has a clean, warm bed.

I am also disturbed by thought that we will have to see more tent cities because in a way, Wendy Pedersen is right...they do seem to work. At least, they did in this instance.

Mayor Robertson, Minister Coleman. I know you want to end homelessness by 2015, so this can't continue. We simply can't afford to find housing for everyone who decides to come from Toronto, or other parts of Canada because they know that Wendy Pedersen and Judy Graves and BC Housing will all be working together to help them get a free, nice warm bed.

Let's stop and review what's really going on here. We can't continue like this.