Friday, June 29, 2018

Conversations That Matter: In Vancouver, a real estate tragedy unfolds interview with Stu McNish and Michael Geller June 29th, 2018

Simon Fraser University’s Centre for Dialogue presents Conversations That Matter. Join veteran Broadcaster Stuart McNish each week for an important and engaging Conversation about the issues shaping our future. Produced in conjunction with the Vancouver Sun

You can watch it here (preferably with a large whiskey or bottle of wine) or read the transcript below:

Stu McNish introduction:

    The tax, upon tax, upon tax that was implemented to make housing in BC, and in Vancouver in particular, affordable, is having the opposite effect.
     It all started with the City of Vancouver's empty home tax, which was designed to bring up to 10,000 empty homes into the rental market. The prediction appears to have significantly missed the mark. Currently, the City of Vancouver has devoted more than $10 million to a program that may turn a few hundred empty or underutilized homes into rental units.
     The provincial government of Christy Clark jumped on the bandwagon and imposed a foreign buyers tax which is being challenged in the courts as unlawful and discriminatory. The John Horgan government, sensing the time was right to continue to meddle in the market, added not one, but two new taxes with the objective of cooling the market and making housing more affordable.
     It's true the market for homes over $3 million has cooled, while, at the time, it has set the condo market ablaze, making the only affordable housing less affordable. We invited planner, developer, and commentator, Michael Geller, to join us for a conversation that matters about the crisis that continues to unfold in BC's real estate markets.

- Mr. Geller, welcome back.
- It's nice to be back.
- We had this conversation a couple of years ago now. You had a 12-point plan that was going to help to alleviate some of the pressures on the housing market here. But there's been a whole bunch of hands that have come in and changed things around. How do you describe the current market right now?
- I think it's a crisis. I think I probably told you that last time, too.
- Yeah, but maybe for a different reason.
- For different reasons. I think the last time we spoke, the crisis had a lot to do with the homeless, the broader affordability issues. I do want to point out, though, that one of the ideas we talked about, the idea of modular housing, to quickly erect it and accommodate people who are otherwise homeless, has finally gained currency, and, indeed, I think is working. So it's always gratifying when every once in a while one of your ideas comes to fruition.
- Don't break your arm patting yourself on the back, there.
- Well, sometimes you have to glow on the inside, Stu. But that was from 10 years ago.

- That's how long. But if it takes that long for us to see adjustments that may actually have an impact, what does that say about the path forward right now?
- I gave a talk on May 10th at SFU which looked at housing affordability over the past three decades. 30 years ago, we were talking about the need to build more apartments and changes in government legislation. We talked about the need to rezone single family properties in order to accommodate more apartments and townhouses, and, quote, "missing middled forms of housing." We're still having those conversations. But we are making progress. Anyone that goes down the Cambie Corridor can see a lot of housing being built. It's not affordable, but at least we are building a lot of housing. Over time, I think it will help. But there's no doubt that we've got some serious issues that we need to address. The one reason that I'm here talking to you and I talk to lots of different people is because I just don't want everyone to think if we can just stop foreign buyers, we can end our affordability challenges.

- Why don't you want them to think that? Because there is a perception that that is the case.
- There is a perception that not only is it a major consideration, and I think it's a major consideration, but that it is the major consideration, and it isn't.
- Plays a part, though, does it not?
- Plays a part. It definitely plays a part. We're gonna talk about some of the measures the government is trying to put in place going after foreign buyers. But, fundamentally, the main issue we have right now is an imbalance between housing demand and the right kind of supply. That is the major issue.

- So does it come down to greater density?
- Comes down to greater density. It comes down to gentle density. It comes down to a lot more housing. But for a lot of people who are truly in need, density will not be the answer. They're gonna need different forms of rent supplements or other forms of subsidies from the various level of government. Because the fact is even if land is free, if you give me free land, I cannot afford to build new rental apartments that are affordable by many of the people who are looking for housing right now. Because the construction costs, the municipal fees, all of the various consulting costs. On a typical project now, it's not unusual to have 15 different consultants, all of whom are being paid to do a professional job. Notwithstanding that, it still will take two or three years to get your approval. All of those things are adding to the cost of housing.
- Does zoning stand in the way of this?
- Zoning stands in the way in some municipalities, but not every municipality.
- But what about Vancouver? You take a look at the zoning, especially on the west side. There's not much that you can do with that land today. It really increased the density.
- Well, that's right.

- The city stands in the way. The same city that's saying we want to create more opportunities for people to live here says, no, but you can't do it there.
- That's right. Because they want to do, now, an overall plan for the neighborhood. I think that is a good idea indeed. Patrick Condon and I think we probably need and overall plan for the city, so we can see how all these different plans fit together.
- Are you telling me there isn't one
- No, there isn't.
- I thought that's supposed to be an official community plan.
- Vancouver does not have an official community plan. Many of us have been arguing for it for years. We don't. We have a local area plan in Grandview-Woodlands. We have a local area plan in Marpole that was approved a couple years ago. We have a local area plan along the Cambie Corridor. But we do not actually have, unlike most other municipalities, an overall official community plan for Vancouver. Many people in the planning profession, as you know, I am a registered planner, think that is a mistake.

-We have also seen measures that have been put into place to make housing available by saying, we're gonna tax you if you don't live in your home for a certain amount of time each year. An empty home tax. Is it gonna have any impact?
- It's a tragedy. The City of Vancouver's imposition of that empty home tax, to my mind, was a tragedy. I fully understand the idea that it seems completely wrong when we have such a shortage of housing to allow someone to buy an apartment or a house and leave it completely empty. That troubles me. It troubles a lot of people. But the city then went and developed this taxation policy which isn't just going after empty homes, it's going after what they decided would be underutilized homes. So what does an underutilized home mean? It means it's the home that's owned by the former NDP cabinet minister who now lives up north, but has kept an apartment in Vancouver for years. Now, all of sudden, she's having to pay this tax. The mayor from an interior town, volunteers who come into the city, people that live in Delta and keep an apartment in Vancouver, all of these people are now being hit by this tax. Now, some people say terrific. In fact, a lot of people say terrific, because it seems wrong that they should have two homes when I don't even have one. But the other side of the coin is we're not creating new rental housing stock. At one time, Tom Davidoff actually predicted in a newspaper column that I have that there would be 10,000 new rental units coming on the market as a result of that tax.

- [Stuart] And the reality?
- The reality as of today is that the city has determined there are 1,200 homes that are either empty or underutilized and another couple of thousand where there's some discussion as to what is their status. There are others, but they are all justifiable reasons why they're empty. Somebody has died, they're under construction, or whatever. So we may see a few hundred rental units come onto the market.
Meanwhile, the city has set up a seven and a half million dollar operating cost, plus an annual two and a half million dollar operating cost, and has creating a tremendous amount of bad will rather than good will. But, more importantly, the reason why I call it a tragedy is the province has then gone and replicated that tax. They call it a speculation tax, but it, too, is a kind of empty home tax, or as my rabbi pointed out, almost a jealousy or envy tax to appease those who are so upset that there's this growing injustice between those who have accommodation and those who don't. That, to my mind, is becoming, the empathy gap in our society is becoming a very important and very unfortunate issue.

- So have we started to move away from a legitimate discussion about creating affordable housing for those who need it to almost a class warfare?
- I think you're absolutely right. Most of the conversation we're having right now, and I listen to the CKNW and CBC every day, and Roundhouse Radio, may it rest in peace. Hopefully, it'll come back.
- It may get resurrected again.
- I hope it does. I read the newspapers, the Georgia Straight. The focus right now is not on all the things we might do to increase the supply of suitable, affordable housing. It's all on whether or not the speculation tax and the increased property transfer tax, and whether the school tax, are gonna achieve their desired goal of increasing the stock of affordable housing. I think most people share with me the view that they're not going. They may generate some revenue. No doubt about it. But there are far better ways to generate revenue to then put towards rents supplements, and subsidies, and social housing.

- You touched on the other tax, school tax. Do you see it as such? Because it's been--
- The so-called school tax. It doesn't even go towards schools. It's going into general revenues. Again, the title was a clever way to disguise what it truly is, which is it's a wealth tax. There was a debate recently about why are people so upset when, for many, it isn't really adding much of a cost. It's because, historically, we have transferred money from the well-to-do to the less well-to-do through things like income tax, consumptions taxes like GST and PST. Now, we're starting to look at wealth tax. I think a lot of people are worried, and I think not without cause, that this is the beginning, that first it's just your home. Then, we start looking at your stock portfolio, your savings. Now, you're gonna say, just a second, Geller, aren't you being a bit alarmist here?
- [Stuart] Aren't you?
- They do that in Switzerland. They do it in lots of countries, just like they have inheritance taxes. Now, someone said to me, we'll never have and inheritance tax here. I said, just a second. What the province is recommending the people do vis-a-vis the school tax is defer all of their increased taxes. Effectively, that is becoming an inheritance tax if you look at it in terms of decline--
- When there's a transfer of ownership, then that outstanding tax needs to be paid.
- Whether or not this was ever contemplated or not, I don't know. All I do know is that the speculation tax, or the so-called speculation tax, is taxing properties that are not necessarily owned by speculators and are not necessarily empty.
- Mr. Davidoff, in my conversation with him, says, okay, these people have money, and we are not charging for the ownership of property in a way that is consistent with so many other jurisdictions around the world. He said, when he came here, he was given his property tax bill, and he said, was that for the month, because he was used to paying a significantly higher tax when he was in the United States.
- He said, we charge on goods and services, whereas, in the United States, it's a different formula.
- So he's now upset that a lot of foreigners are coming to this country. On one hand, they're keeping their places empty. They're not placing any demand on our services. But others are living here placing demand on services, and because they're not paying income tax, he feels they're not paying their fair share. I'd like to respond this way. Firstly, he's wrong. Our property taxes are not as low as he believes they are if you look at the rest of Canada, because our property taxes are based on what is the cost to run the municipality.
- [Stuart] The mill rate.
- And what is the cost to run the schools, and the small component of public transportation, and a couple of other things. So it is exactly that. It's an assessed value of the home times the mill rate. Yes, the mill rate is extremely low in Vancouver compared to most North American cities. But the mean price of property is mean. It's very, very high, the average price, if you want to look at it that way. When you combine the two together, the average property taxes in Vancouver are the second highest in Canada. That's right. Tom is just looking at the mill rate, which is very low. He isn't looking at what the average tax payer pays. The next thing is to look at what do those taxes cover and how are they accounted for? In the United States, as we all know, mortgage interest is deductible. Property taxes are also deductible.
Not everywhere and not the full extent. But it's an entirely different system. To me, it is tragic, if I could use that word again, that all of this government policy has arisen, in large part, because Tom generally believed, as did some of the other academics, it wasn't just him, that our property taxes were too low. They're only too low relative to some American cities. But I've looked at which has the highest mill rate in the United States, and that's a community where the average or the mean house price, it was $123,000.

- Oh, my gosh.
- So, yes, you may have a mill rate that's 12 or 14, or whatever, compared to one here that may be three or four. But it is not correct to say that our property taxes are completely out of whack, and if we want to whack those foreign buyers, we've got to up the property taxes. By the way, I don't disagree that we need to rethink our whole assessment system. I'm troubled by the fact that our property taxes are based on the value of a home, not on the level of services they require. In Vietnam, your property taxes are based on the frontage of your property, the thinking being a wide property uses more road, sidewalk, and pipes than a narrow one. I think we should reward people who live in apartment buildings and more compact forms of housing, rather than in single family homes and sprawling subdivisions. We should have different types of classification for multifamily and single family. I'd be in favor of seeing that rethought. I'd also be in favor of a completely different, progressive tax, if we want to, maybe, emulate the income tax so that those who are in less expensive homes pay a lower mill rate than those who live in more expensive homes. There's lot of things we could do to make the system more equitable. But the last thing we should have been doing was this speculation tax and the school tax, because the real irony is most of the people I know who are likely to be hit by this tax are clever enough to figure out how to avoid having to pay it.

- How are we going to accommodate these new organizations that are wanting to hire thousands of people and bring them into Vancouver? Because the pool of talent isn't sitting there. They have to come from somewhere, and, usually, that means either outside of British Columbia and frequently outside the country. Have we not created a housing policy that stands in the way of our economic development policy?
- We have. That is why I showed a slide recently how the Board of Trade opposed the development of the south shore False Creek for housing. They thought it should be a park. That was in 1973. Today, the Board of Trade is regularly holding workshops on housing affordability, because it realizes that the cost of housing is the major impediment to the economic growth of our region. Because far too many companies simply cannot attract employees. It's not necessarily just low level employees. Somebody stopped me on the golf course not too long ago to say, we can't even get a pathologist to come to Vancouver, because he can't afford to buy a home here. He was coming from an Eastern American city. So, in other words, it's not just nurses, it's doctors. It's virtually all socioeconomic groups who are struggling. It's a very important issue to address.

- Needless to say, the effective or the accumulated effect of all this playing with the market, it has put a chill on real estate values.
- There is no doubt that at the high end of the market, those more expensive single family homes and the British properties in West Van, the west side of Vancouver, as the result of the foreign buyers tax and these other taxes, the price of those houses and the number of sales have both dropped significantly. But, ironically and very sadly, at the lower end of the market, the price of condominiums has not gone down.
- And continues to rise.
- It continues to rise, and, ironically, some realtors tell me they believe in part it's because as you make the higher end more expensive, more and more people are saying, well, maybe it is time to downsize. So instead of getting this trickling down or trickling up theory where everything would go down in price, yes, so that $4 million house is now a $3.3 million house. Well, did that really help everybody that we really wanted to help?
- So, in the last couple of years, we've gone from what I believe to be a legitimate discussion about housing affordability, and it really was, and I'm not sure that that's how I would characterize it now.

Are you hopeful that we'll find some kind of solution in the next decade?
- Oh, in the next decade, I think we'll see some improvements. But, although I'm not that partisan, I am concerned that the policies that I'm seeing coming from the NDP related to attacking demand are troublesome. I think what they're trying to do in terms of increasing the supply of affordable housing, social housing, increasing rent supplement, that's terrific. Indeed, I went to the budget announcement, and in my first column in the Courier said, it's a good start. But I didn't realize at the time the full impact of that speculation tax and, to a lesser degree, the school tax. Those things are not a good start. One thing that most people don't appreciate, Stu, is that the school tax doesn't just apply to homes over $3 million, it applies to all development sites undergoing development. So we have the absurd situation, now, of a developer owning a property upon which they're trying to build some rental housing and a mix of housing, and they are now subject to that school tax, because they're also subject to the speculation tax if the houses or the property is empty. Now, again, was this intended? You'd say, well, I don't know.
It's as absurd as it was to go after those Gulf island properties, those cabins. I just don't understand what the government was thinking.
- Well, thank you for coming in and doing this. I'm sure we're gonna have this conversation next year, the year after, and the year after, and we still won't have a clear-cut solution.
- Things will be better in 10 years.
- [Stuart] Thanks.
- Thank you.

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Sunday, June 17, 2018

Father's Day 2018 with Ian Anderson & Jethro Tull at Ste. Michelle Winery.

    I won't be celebrating Father's Day with my daughters today. But not because they dislike me as much as some of the people on the Vancouver is Falling Facebook Group. We celebrated Father's Day last Sunday with a trip to the Jethro Tull 50th Anniversary concert at the Chateau Ste. Michelle Winery outside of Seattle.
     This trip also included an overnight stay at a most interesting hotel in Bothell called McMenamins Anderson School. I'll write about it later.
     My first introduction to Jethro Tull was in 1968 when I moved to Manchester England after 3 years of architecture school. I was born in Blackpool, Lancashire, where my mother's family moved during WW2 thinking it would be less likely bombed than Hull or other industrialized places.
     Those who have visited Blackpool often think that it's a pity it wasn't bombed!
    In subsequent years, Jethro Tull, and in particular, Ian Anderson, its zany flute-playing creator became my favourite musicians, along with the Beatles and Moody Blues. (What I didn't realize until last week was that Ian Anderson also lived in Blackpool for many years.)
     Jethro Tull's 50th Anniversary Tour has an astounding international schedule but does include stops in Toronto Ottawa and Montreal in early July. My daughters arranged tickets for the Seattle area stop since it was closest to Vancouver.
    The Ste. Michelle Winery holds regular concerts throughout the summer,
but you wouldn't know this from last Sunday's experience. Many patrons, (ourselves included) were left standing in the rain trying to get in until well after the concert started.
     We subsequently learned this was due to new and heightened security arrangements. But what was unforgivable is that no one from the venue came down the line to explain what was happening, nor apologize. Moreover, we subsequently learned there was a second entrance that was barely used.
    Once inside, this can be an attractive experience. You can go into the winery and buy a bottle of wine and enjoy it at the concert. The sound was good and the stage and seating arrangements are ok.
    To the management of Ste. Michelle Winery I say you really need to give your head a shake and do a better job in future, especially when it's raining.
     So here are a few images of the 70 year old Ian Anderson (like me, he's lost most of his hair) and the group. If you are in Toronto, Ottawa or Montreal, while Anderson's voice is not what it used to be, I highly recommend the show.
     Thanks Georgia and Claire for a most memorable Father's Day present and experience.
The show includes video messages from former members of the group
ps, The show ends with a performance of Aqualung, the group's most memorable song. It's about a homeless man, and seems as relevant today as it was almost fifty years ago when it was written. For those of you who don't know all the lyrics....

Sitting on a park bench
Eying little girls with bad intent
Snots running down his nose
Greasy fingers smearing shabby clothes, hey, Aqualung
Drying in the cold sun
Watching as the frilly panties run, hey, Aqualung
Feeling like a dead duck
Spitting out pieces of his broken luck, oh, Aqualung
Sun streaking cold, an old man wandering lonely
Taking time, the only way he knows
Leg hurting bad as he bends to pick a dog end
He goes down to a bog and warms his feet
Feeling alone, the army's up the road
Salvation a la mode and a cup of tea
Aqualung, my friend, don't you start away uneasy
You poor old sod, you see it's only me
Do you still remember
December's foggy freeze
When the ice that clings on to your beard
It was screaming agony
Hey and
Sun streaking cold, an old man wandering lonely
Taking time, the only way he knows
Leg hurting bad as he bends to pick a dog end
He goes down to a bog and warms his feet
Feeling alone, the army's up the road
Salvation a la mode and a cup of tea
Aqualung my friend don't you start away uneasy
You poor old sod, you see it's only me
Oh Aqualung
Songwriters: Ian Anderson
Aqualung lyrics © BMG Rights Management US, LLC

Sunday, June 10, 2018

Opinion: Cities need to be designed for pedestrians, transit, bikes… not just cars. Vancouver Courier June 7, 2018

     Do you hate city planners? If so, you’re not alone.
    “Who Hates Planners and Why?” was one of the workshops at the Planning Institute of British Columbia’s annual conference in Victoria last week. Attended by more than 450 delegates, the event marked the institute’s 60th anniversary.
     Founded by eight members in 1958, PIBC now has 1,600 members throughout B.C. and the Yukon. While the founding members were all men, today women outnumber the men.

Professional planners use their knowledge, skills and experience to help create more livable and sustainable communities and environments. In so doing, they often raise the ire of politicians, citizens, developers, architect and others.While we usually associate planners with municipal land-use, zoning and developments, PIBC members work in many different fields. They include resource and environmental management, heritage conservation, transportation, economic development and law.
     As Lisa Helps, Mayor of Victoria, noted in her opening remarks, planners are by nature optimistic. They start with what exists today and must plan for an increasingly uncertain future. She urged planners to be courageous, to stand up to politicians and be willing to recommend changes to policies that don’t work.
     In the opening keynote address, internationally renowned planner Gil Penalosa inspired the audience with a presentation on how planners must adapt to a changing world. As life expectancy increases, it is increasingly important to design cities for those who are eight and 80, not just those 30 and athletic.
     In the past, we designed our cities to accommodate cars. However, those under 16 do not drive and many seniors are as afraid of losing their drivers license as getting cancer. We need to design cities for those who don’t have a driver’s license.
     Since streets comprise 25 to 35 per cent of the space occupied by cities, we must design for pedestrians and cyclists as much as cars. Rather than worry only about potholes, we need to worry about broken sidewalks and playgrounds.
     Penalosa argues good sidewalks and cycle paths dignify a community.
For years, he has been promoting the idea of Ciclovias, a Spanish term that means cycleway. They began in his home city of Bogota, Colombia in the 1970s, when the main streets were blocked off to cars for runners, skaters and cyclists each Sunday and public holiday from 7 a.m. until 2 p.m.  Today they are happening in Paris and Delhi and dozens of other cities around the world.
Penalosa challenged planners to consider that in 40 years we are going to double the size of cities.   Half of the homes we will require are yet to be built.
     As we plan cities of the future, we must not repeat the mistakes of the past half century when we built primarily low-density neighbourhoods, devoid of commercial areas, linked to downtowns by extensive expressways.
     We also need to focus on preventing pedestrian injuries and deaths. One way to do this is to reduce road speeds to 30 km in all residential areas, an idea gaining currency around the world.
We need to improve public transit, whether it be rapid bus, light rail, or subways. In Penalosa’s opinion, a civilized city isn’t one where the poor have cars, but rather it is one where the rich use public transit. This means designing more comfortable, weather-protected bus-stop shelters.
Penalosa concluded his talk by challenging the audience to plan the city for children. If we want them to walk to school, we must retain and build small neighbourhood schools. We must never forget the perspective at 95 cm — the height of a child.
     Not surprisingly, many of the conference workshops addressed housing affordability and how planners can more effectively work with neighbourhood residents and politicians to achieve buy-in for more housing choices.
     One idea is the creation of “house-plexes,” comprising three, four or six dwellings. In some cases, they may be larger homes that have been subdivided. In others, they will be new structures offering smaller homes for sale or rent on former single-family lots.
     While we may often hate planners, they have an important role to play since one thing all conference delegates agreed upon is the answer to housing affordability is not more taxes.

Looking Back, Looking Forward. Relocatable Modular Housing and Jethro Tull!

Some say you shouldn't look back. Just look forward. I disagree.

In spring 1971, while finishing thesis drawings for a factory-produced relocatable modular housing system, I was listening to Jethro Tull's recently released Aqualung album in the UofT  Architecture School Studio at 230 College Street.

Today, UofT has a new school. Relocatable modular housing is being built around the province and Georgia Geller & Claire Geller are taking me to see Jethro Tull's 50th Anniversary Tour at Ste. Michelle Winery in Washington State. Looking back, looking forward!

Tuesday, June 5, 2018

Baku Azerbaijan. Yes, they're real!

During my last trip to Russia I tried to arrange a side journey to Azerbaijan since the country has fascinated me since I was a 10-year old stamp collector. Unfortunately, I couldn't obtain my visa in time. However, having just visited Astana, all being well, I hope to visit Baku, the capital city this fall when I travel the Silk Route between Tbilisi and Ashgabat.In case you are wondering why I am so eager to visit, here are some photos!